{"id":2343,"date":"2024-06-11T06:53:11","date_gmt":"2024-06-11T04:53:11","guid":{"rendered":"https:\/\/alontax.com\/known-expense-yes-or-no\/"},"modified":"2024-06-11T06:53:11","modified_gmt":"2024-06-11T04:53:11","slug":"known-expense-yes-or-no","status":"publish","type":"post","link":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/","title":{"rendered":"Known expense &#8211; yes or no?"},"content":{"rendered":"<div class=\"elementor-element elementor-element-32e2cb97 elementor-widget elementor-widget-text-editor\" data-id=\"32e2cb97\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p><strong>One of the biggest problems that a self-employed person in Israel has is not knowing or understanding whether his business expenses are recognized as expenses or not.<\/strong><\/p>\n<p>And in general, what does it give if it is considered an expense? What do I gain from this if anything?<\/p>\n<p><strong>The basic formula that the tax authorities work according to is: income &#8211; expenses = profit.<\/strong><\/p>\n<p>Hence the conclusion: the greater the expenses, the smaller our profit.<\/p>\n<p>Although at the principle level we want a bigger profit, in front of the tax authorities we want a smaller profit, this is because income tax and national insurance are only on profit.<\/p>\n<p>First I will expand and say that a recognized expense is an expense whose purpose is to help generate current income, maintain the normal state of the business and even an expense that is intended to increase income.<\/p>\n<p>Here, too, the expenses can be divided into two:<\/p>\n<p>1) Current expenses for the operation and maintenance of the business at the current level.<br \/>\n2) One-time expenses that serve the business in the long term and are recognized only in their relative part for that year. (what are called depreciation expenses).<\/p>\n<p><strong>In this article I will try to answer as many common questions as possible about recognized expenses yes or no.<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-14fd01a elementor-widget elementor-widget-heading\" data-id=\"14fd01a\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Rent<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-3059b436 elementor-widget elementor-widget-text-editor\" data-id=\"3059b436\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Rent for a building or land used to obtain income is a recognized expense.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-56640ad2 elementor-widget elementor-widget-heading\" data-id=\"56640ad2\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Property improvements<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-60970fff elementor-widget elementor-widget-text-editor\" data-id=\"60970fff\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Improvements to the property of the business, whether it is rented or not, as long as it is done in order to maintain its condition or improve it for the purpose of obtaining greater profits, will be considered a recognized expense, but since it is a long-term improvement that will last for years, a proportional part of its expense will be recognized each year, while treatment And ongoing maintenance of the business will be recognized already in the year of their issue.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-40d3f305 elementor-widget elementor-widget-heading\" data-id=\"40d3f305\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Telephone and cellular devices<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-6ff7b1c4 elementor-widget elementor-widget-text-editor\" data-id=\"6ff7b1c4\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Expenses for maintaining the phone line in the business will be recognized in full, while our cell phone is not used entirely for work purposes, therefore it will only be recognized in part as an expense, about 50%.<\/p>\n<p>Nowadays, most of the plans are already unlimited calls, so it will be recognized as an expense after deducting downloads that are not related to the call account, such as a payment for a device, the cost of which will be recognized separately.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-4130b36 elementor-widget elementor-widget-heading\" data-id=\"4130b36\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Electricity expenses \/ property tax \/ house committee \/ management fees<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-30be9c8 elementor-widget elementor-widget-text-editor\" data-id=\"30be9c8\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Electricity expenses and property taxes are both considered recognized expenses, but if the business operates from home, the electricity expenses and property taxes will not be recognized in full, although only in a relative part.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-c9e7753 elementor-widget elementor-widget-heading\" data-id=\"c9e7753\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">insurance<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-aa43f24 elementor-widget elementor-widget-text-editor\" data-id=\"aa43f24\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>If we are talking about car insurance, building insurance, property insurance, professional liability insurance and the like, those that are used by the business to generate income, will be considered recognized expenses. Regarding the vehicle, the insurance will be recognized as vehicle maintenance expenses if it is registered in the name of the business, or if alternatively we have a certificate from the person who owns the vehicle confirming that his vehicle does serve our business. (If you do not have the certificate in question, contact me and I will send it to you by email).<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-0ec9ec5 elementor-widget elementor-widget-heading\" data-id=\"0ec9ec5\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Shared expenses \\ mixed<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-eb959a3 elementor-widget elementor-widget-text-editor\" data-id=\"eb959a3\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Sometimes a number of businesses operate under the same roof, usually offices that share the expenses of rent, electricity, property taxes and building maintenance in general, in such situations there is usually a clear contract\/agreement that says what the relative share of each is in the space, hence their clear share in the payments and only this relative share will count as a seller even if each of them submits an invoice for the full amount.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-8a9e98f elementor-widget elementor-widget-heading\" data-id=\"8a9e98f\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Computer software \/ Internet provider and infrastructure<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-f80a050 elementor-widget elementor-widget-text-editor\" data-id=\"f80a050\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Nowadays, most businesses work with advanced computer programs that cost considerable sums,<br \/>\nTherefore, the law answers the question of whether computer software is a recognized expense in the following way:<br \/>\nSoftware that is going to be used by us for a relatively short term, such as: updates, usage rights, etc<br \/>\nare recognized expenses.<\/p>\n<p>Compared to software purchased for use by the office over the years, such as: a customer management system, dedicated software, etc. will only be recognized in their partial expense for that reporting year (depreciation expenses).<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-8722025 elementor-widget elementor-widget-heading\" data-id=\"8722025\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Lost debts<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-cbafc80 elementor-widget elementor-widget-text-editor\" data-id=\"cbafc80\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Unfortunately, in every business there are customers who turn out to be problematic in retrospect.<br \/>\nWhat results from this is that there are revenues backed up by tax invoices but without receipts at all.<br \/>\nThese debts, after using all means of collection according to law and according to the amount of the debt, are considered after a certain period as a bad debt.<\/p>\n<p>At the principle level, debts are not considered a recognized expense unless it is proven in court that the debt cannot be returned, in such cases the debt will be recognized as a recognized expense in part or in full according to the court&#8217;s decision.<br \/>\nAt the same time, it is possible to fish for the possibility of the court to come up with an opinion from a lawyer, which will rule on one of the following two options:<\/p>\n<p>A. The expected costs of trying to collect the debt exceed the amount of the original debt.<br \/>\nB. The option to pay the debt should not be obligated &#8211; that is, the debt is not repayable.<br \/>\nIt is important to note further on these things, if and despite recognizing the debt as &#8220;lost&#8221; we were able to collect the debt from the customer that you receive will be registered with us as new income in the year in which the payment was received.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-62638c6 elementor-widget elementor-widget-heading\" data-id=\"62638c6\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Marketing and advertising expenses<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-c2e9596 elementor-widget elementor-widget-text-editor\" data-id=\"c2e9596\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>When it comes to a new business that invests in marketing and advertising in a way that the business will reap the fruits of in the long run, such as: market research, surveys and focus groups, distribution infrastructure for stores, etc.,<br \/>\nwill not be recognized as a recognized expense already that year but only at its relative value for that year (depreciation).<br \/>\nThe same goes for expenses for placing signage, etc., which was done at the beginning of the business.<\/p>\n<p>On the other hand, ongoing advertising that renews every month and every relatively short period of time will be considered a recognized expense in that reporting year, such as: advertising on Facebook, sponsored promotion, newspapers and radio.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-8a50a13 elementor-widget elementor-widget-heading\" data-id=\"8a50a13\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Maintaining a website<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-3aaee61 elementor-widget elementor-widget-text-editor\" data-id=\"3aaee61\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>The establishment of a business website with all its initial expenses is recognized as a long-term investment,<br \/>\nAnd hence it will only be recognized proportionally according to predetermined % depreciation, however the ongoing maintenance and operation costs of the website will be considered as a recognized expense.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-739968b elementor-widget elementor-widget-heading\" data-id=\"739968b\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Mail and deliveries<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-e1c66df elementor-widget elementor-widget-text-editor\" data-id=\"e1c66df\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>In both cases, the use of mail or a courier service to generate income is considered a recognized expense.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-5bf44f3 elementor-widget elementor-widget-heading\" data-id=\"5bf44f3\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Accounting and professional expenses<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-91dba59 elementor-widget elementor-widget-text-editor\" data-id=\"91dba59\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Bookkeeping is a necessary expense in business and it is recognized by the tax authorities as a recognized expense, similar to other professional services, such as: payroll, business consulting, etc.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-246edbf elementor-widget elementor-widget-heading\" data-id=\"246edbf\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Legal expenses<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-b01f60e elementor-widget elementor-widget-text-editor\" data-id=\"b01f60e\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>As a rule, legal expenses are considered recognized expenses whether it is legal treatment when the business is on the side of the plaintiff or the defendant, or whether it is legal expenses for preparing reports for the income tax or for tax procedures.<br \/>\nOn the other hand, legal expenses for a tort claim that entails renovation or buying new property,<br \/>\nThe expenses will be recognized only in their relative part because the business will use them for years, such as: purchasing a license to market products in the US and Europe, obtaining a license to manage a business, etc.<\/p>\n<p>Also, legal treatment of a criminal nature will also be recognized as a recognized expense, but it is subject to the degree of damage to legality and public order, if it is a crime with premeditated criminal intent with intent or recklessness, the legal expense will not be recognized for tax purposes.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-1b8feb0 elementor-widget elementor-widget-heading\" data-id=\"1b8feb0\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">travel and taxis<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-cb73829 elementor-widget elementor-widget-text-editor\" data-id=\"cb73829\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Travel expenses will be recognized as recognized expenses almost universally, there is one caveat that says that if it is an employee who needs to get to work, the travel expenses will be deducted from his salary and recognized as work expenses and not as travel expenses.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-8c33ce7 elementor-widget elementor-widget-heading\" data-id=\"8c33ce7\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Travel abroad<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-eb225a6 elementor-widget elementor-widget-text-editor\" data-id=\"eb225a6\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>If the trip is a trip for the purpose of generating income (business trip), the recognition of expenses is divided and limited in the following sections:<br \/>\n\u2022 The price of the flight ticket will be recognized in full and its price does not exceed the price of a business class ticket, hence if a ticket is purchased for first class, the ticket will be recognized only in proportion to the amount of the cost in business class<br \/>\n\u2022 Lodging expenses &#8211; for the first seven nights, lodging expenses will be recognized in full up to the ceiling established by law, from the eighth night onward, the expense will be recognized only at the minimum amount for lodging established by law, if it is a trip of over 90 days, lodging expenses will be recognized only at the minimum amount without distinction in the first week.<br \/>\nIt is important to note that if there was not at least 14 days in Israel between each trip, the two trips will be considered as one trip in regards to the recognition of overnight stays.<br \/>\n\u2022 Other stay expenses during the trip abroad are considered recognized expenses and will not even be charged upon presentation of references for their expenditure, provided they do not exceed the minimum amount established by law.<br \/>\n\u2022 Renting a car in the sand will be recognized up to the minimum ceiling set by law.<br \/>\n\u2022 Children&#8217;s education expenses abroad &#8211; if the trip exceeds 10 months, you can request recognition of education expenses for children under the age of 18 up to the ceiling set by law.<br \/>\n(Sometimes it is possible to request additional recognition from the Tax Authority for recognition of an unlimited amount depending on the place of residence abroad and the conditions of study)<br \/>\nIn regards to traveling abroad, the ceilings must be checked for each and every matter according to the country to which you are traveling, at the same time you must maintain a travel report abroad detailing the needs of the trip and its expenses in accordance with the provisions of the law.<br \/>\nIt is important to note that if there is a combination of business and private travel, the expenses will not be recognized at all unless a clear and certain distinction can be made between the expenses.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-823348c elementor-widget elementor-widget-heading\" data-id=\"823348c\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Bed and breakfast expenses in Israel<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-cbaad7d elementor-widget elementor-widget-text-editor\" data-id=\"cbaad7d\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>If, for a business reason, it is necessary to spend the night away from home and to eat outside, the expense will be considered as incurred, and if it is a distance of less than 100 km, it is necessary to show the necessity of the trip. In any case, the expense will be recognized up to the ceiling imposed by law.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-cdea5b7 elementor-widget elementor-widget-heading\" data-id=\"cdea5b7\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Refreshments and accommodation<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-aa5088d elementor-widget elementor-widget-text-editor\" data-id=\"aa5088d\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Basic catering expenses required for entertaining guests will only be recognized at a rate of 80%, food and drink expenses for employees will be recognized as work expenses and if it is private then it will not be recognized at all unless it is about entertaining guests from abroad and then the expense will be recognized in full.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-e2ee51e elementor-widget elementor-widget-heading\" data-id=\"e2ee51e\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Gifts for employees, customers and business partners<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-9d9966a elementor-widget elementor-widget-text-editor\" data-id=\"9d9966a\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Holiday gifts for employees are considered a recognized expense provided they are credited to the employee&#8217;s salary as labor income, if the gift is for a personal event of one of the employees, the expense is also recognized even though it was not credited to the employee&#8217;s salary, gifts to customers \/ suppliers \/ those related to the business will be considered a recognized expense only if the business relationship is proven Among the factors, and this by keeping an accurate record, who received? what did he get And where did you get it?<br \/>\nAt the shekel level, you can take a picture of a bag or save an invitation to an event for the purpose of proving the expense.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-84aceb5 elementor-widget elementor-widget-heading\" data-id=\"84aceb5\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Donations<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-b24aa8b elementor-widget elementor-widget-text-editor\" data-id=\"b24aa8b\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>These expenses are not considered a business expense and do not promote any income creation,<br \/>\nAt the same time, it is possible to use donations to institutions recognized in section 46 to reduce income tax payments at a rate of 35% of the total donation given.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-7015a73 elementor-widget elementor-widget-heading\" data-id=\"7015a73\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Food products and meals in restaurants<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-7b572e2 elementor-widget elementor-widget-text-editor\" data-id=\"7b572e2\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Almost overwhelmingly, these expenses are not recognized, but there are situations in which if it can be proven that there was a business need to eat out, it will be possible to recognize the expenses up to the ceiling allowed by law.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-67c9ba0 elementor-widget elementor-widget-heading\" data-id=\"67c9ba0\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Studies, further training and professional literature<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-d060fe3 elementor-widget elementor-widget-text-editor\" data-id=\"d060fe3\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Studies to acquire a bachelor&#8217;s \/ master&#8217;s degree or basic knowledge are not considered a recognized expense,<br \/>\nBut on the other hand, studies and training programs that are designed to preserve the existing,<br \/>\nOr alternatively, to increase the pool of knowledge relevant to business and hence to increase the income will indeed be considered a recognized expense.<br \/>\nBooks, newspapers and professional journals will be considered recognized publications.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-c4194c8 elementor-widget elementor-widget-heading\" data-id=\"c4194c8\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Membership fees for professional associations and bureaus<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-e6d5715 elementor-widget elementor-widget-text-editor\" data-id=\"e6d5715\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>There are many professions that are grouped under professional chambers and organizations, such as: the chamber of tax advisors, lawyers, brokers, etc., all of these are necessary for the day-to-day activities of their members, and therefore will be recognized as a fully recognized expense.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-4a68057 elementor-widget elementor-widget-heading\" data-id=\"4a68057\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Work clothes<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-1bfcbc5 elementor-widget elementor-widget-text-editor\" data-id=\"1bfcbc5\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>If the clothing meets one of the following conditions, it will be considered a recognized expense:<br \/>\n1. The affiliation to the business can be prominently identified<br \/>\n2. By law there is an obligation to demand the clothing.<br \/>\nIf the clothing can only be used for work, it will be recognized in full, but if the clothing will also have personal use, the expense will only be recognized at 80%.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-25607fb elementor-widget elementor-widget-heading\" data-id=\"25607fb\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Fines, parking reports, bribes, etc<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-81c69a0 elementor-widget elementor-widget-text-editor\" data-id=\"81c69a0\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>Fines and reports are not considered a recognized expense, based on the simple logic of the legislator that it is impossible for a person to commit an offense and violate the law on the one hand and benefit from a tax reduction on the other.<br \/>\nEven if it is a third world country where you have to pay bribes to the authorities, because in Israel bribery is illegal, the expenditure for it will not be recognized in Israel as a recognized expenditure either.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-7d9403b elementor-widget elementor-widget-heading\" data-id=\"7d9403b\" data-element_type=\"widget\" data-widget_type=\"heading.default\">\n<div class=\"elementor-widget-container\">\n<h2 class=\"elementor-heading-title elementor-size-default\">Depreciation expenses<\/h2>\n<\/div>\n<\/div>\n<div class=\"elementor-element elementor-element-b5d3571 elementor-widget elementor-widget-text-editor\" data-id=\"b5d3571\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n<div class=\"elementor-widget-container\">\n<div class=\"elementor-text-editor elementor-clearfix\">\n<p>During the article we mentioned expenses that will not be recognized in full during the current year because they are intended to serve us in the long term, for example the purchase of equipment, machines, permanent signs, etc.<br \/>\nIf so, how will these expenses be expressed and reduce our tax payments?<br \/>\nThe answer is simple, we, (the CPA tax consultant), estimate how long the asset we purchased is supposed to serve the business, i.e. what is the economic life of the asset, and divide the cost of the asset by the number of years the asset is supposed to serve us, so for example: a coffee machine is expected to operate for 5 years and its cost is 50,000 NIS, we will demand 20% of its initial cost each year as an expense in the form of depreciation expenses, and each asset and its economic life.<\/p>\n<p><strong>A final word:<\/strong><br \/>\nThere are a variety of other areas in which the question arises as to whether an expense is considered a sale, and not everything is always black or white. I have tried to answer here the most common questions that bother every self-employed person.<\/p>\n<p>We advocate the method of &#8220;when there is order everything will be fine&#8221; so be sure to ask for invoices with every purchase and we will do our best so that you pay the minimum!<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>One of the biggest problems that a self-employed person in Israel has is not knowing or understanding whether his business expenses are recognized as expenses or<span class=\"excerpt-hellip\"> [\u2026]<\/span><\/p>\n","protected":false},"author":7,"featured_media":2306,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53],"tags":[],"class_list":["post-2343","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Known expense - yes or no? - \u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Known expense - yes or no? - \u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9\" \/>\n<meta property=\"og:description\" content=\"One of the biggest problems that a self-employed person in Israel has is not knowing or understanding whether his business expenses are recognized as expenses or [\u2026]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/\" \/>\n<meta property=\"og:site_name\" content=\"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9\" \/>\n<meta property=\"article:published_time\" content=\"2024-06-11T04:53:11+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/alontax.com\/wp-content\/uploads\/2024\/06\/Article06.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"350\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9 \u05d9\u05d5\u05e2\u05e5 \u05de\u05e1\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9 \u05d9\u05d5\u05e2\u05e5 \u05de\u05e1\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"13 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/\",\"url\":\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/\",\"name\":\"Known expense - yes or no? - \u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9\",\"isPartOf\":{\"@id\":\"https:\/\/alontax.com\/en\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/alontax.com\/wp-content\/uploads\/2024\/06\/Article06.jpg\",\"datePublished\":\"2024-06-11T04:53:11+00:00\",\"dateModified\":\"2024-06-11T04:53:11+00:00\",\"author\":{\"@id\":\"https:\/\/alontax.com\/en\/#\/schema\/person\/29c0407ed7ce32f4edc3ca7a4a642842\"},\"breadcrumb\":{\"@id\":\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#primaryimage\",\"url\":\"https:\/\/alontax.com\/wp-content\/uploads\/2024\/06\/Article06.jpg\",\"contentUrl\":\"https:\/\/alontax.com\/wp-content\/uploads\/2024\/06\/Article06.jpg\",\"width\":1000,\"height\":350},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"\u05d3\u05e3 \u05d4\u05d1\u05d9\u05ea\",\"item\":\"https:\/\/alontax.com\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Known expense &#8211; yes or no?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/alontax.com\/en\/#website\",\"url\":\"https:\/\/alontax.com\/en\/\",\"name\":\"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9\",\"description\":\"\u05d9\u05d5\u05e2\u05e5 \u05de\u05e1 \u05de\u05d5\u05e1\u05de\u05da\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/alontax.com\/en\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/alontax.com\/en\/#\/schema\/person\/29c0407ed7ce32f4edc3ca7a4a642842\",\"name\":\"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9 \u05d9\u05d5\u05e2\u05e5 \u05de\u05e1\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/alontax.com\/en\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/716a62cba590b0404e08b1c2120c5985f0aab0916eb8f969b8da3bd9ca1e2fc3?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/716a62cba590b0404e08b1c2120c5985f0aab0916eb8f969b8da3bd9ca1e2fc3?s=96&d=mm&r=g\",\"caption\":\"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9 \u05d9\u05d5\u05e2\u05e5 \u05de\u05e1\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Known expense - yes or no? - \u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/","og_locale":"en_US","og_type":"article","og_title":"Known expense - yes or no? - \u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9","og_description":"One of the biggest problems that a self-employed person in Israel has is not knowing or understanding whether his business expenses are recognized as expenses or [\u2026]","og_url":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/","og_site_name":"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9","article_published_time":"2024-06-11T04:53:11+00:00","og_image":[{"width":1000,"height":350,"url":"https:\/\/alontax.com\/wp-content\/uploads\/2024\/06\/Article06.jpg","type":"image\/jpeg"}],"author":"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9 \u05d9\u05d5\u05e2\u05e5 \u05de\u05e1","twitter_card":"summary_large_image","twitter_misc":{"Written by":"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9 \u05d9\u05d5\u05e2\u05e5 \u05de\u05e1","Est. reading time":"13 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/","url":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/","name":"Known expense - yes or no? - \u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9","isPartOf":{"@id":"https:\/\/alontax.com\/en\/#website"},"primaryImageOfPage":{"@id":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#primaryimage"},"image":{"@id":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#primaryimage"},"thumbnailUrl":"https:\/\/alontax.com\/wp-content\/uploads\/2024\/06\/Article06.jpg","datePublished":"2024-06-11T04:53:11+00:00","dateModified":"2024-06-11T04:53:11+00:00","author":{"@id":"https:\/\/alontax.com\/en\/#\/schema\/person\/29c0407ed7ce32f4edc3ca7a4a642842"},"breadcrumb":{"@id":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/alontax.com\/en\/known-expense-yes-or-no\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#primaryimage","url":"https:\/\/alontax.com\/wp-content\/uploads\/2024\/06\/Article06.jpg","contentUrl":"https:\/\/alontax.com\/wp-content\/uploads\/2024\/06\/Article06.jpg","width":1000,"height":350},{"@type":"BreadcrumbList","@id":"https:\/\/alontax.com\/en\/known-expense-yes-or-no\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"\u05d3\u05e3 \u05d4\u05d1\u05d9\u05ea","item":"https:\/\/alontax.com\/en\/"},{"@type":"ListItem","position":2,"name":"Known expense &#8211; yes or no?"}]},{"@type":"WebSite","@id":"https:\/\/alontax.com\/en\/#website","url":"https:\/\/alontax.com\/en\/","name":"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9","description":"\u05d9\u05d5\u05e2\u05e5 \u05de\u05e1 \u05de\u05d5\u05e1\u05de\u05da","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/alontax.com\/en\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/alontax.com\/en\/#\/schema\/person\/29c0407ed7ce32f4edc3ca7a4a642842","name":"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9 \u05d9\u05d5\u05e2\u05e5 \u05de\u05e1","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/alontax.com\/en\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/716a62cba590b0404e08b1c2120c5985f0aab0916eb8f969b8da3bd9ca1e2fc3?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/716a62cba590b0404e08b1c2120c5985f0aab0916eb8f969b8da3bd9ca1e2fc3?s=96&d=mm&r=g","caption":"\u05d0\u05dc\u05d5\u05df \u05d8\u05d4\u05d5\u05e8\u05d9 \u05d9\u05d5\u05e2\u05e5 \u05de\u05e1"}}]}},"_links":{"self":[{"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/posts\/2343","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/comments?post=2343"}],"version-history":[{"count":0,"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/posts\/2343\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/media\/2306"}],"wp:attachment":[{"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/media?parent=2343"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/categories?post=2343"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alontax.com\/en\/wp-json\/wp\/v2\/tags?post=2343"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}