Businesses pay the government for their services.
When the government is not paying, businesses take advantage of defrayments.
These are called “defrayments” because they are paid from other sources.
For example, a car dealership or a restaurant may charge a restaurant owner a percentage of the profit on the sale of a new vehicle.
In this example, the business owner has an incentive to take the extra risk.
If a car dealer charges a $5,000 fee, the car dealer will also charge the same fee on a new car.
The restaurant owner has the incentive to offer the same service for less money.
Defrayment is a form of government spending that helps companies and individuals reduce costs.
Businesses have to cover the costs of operating their businesses by paying for a defrayMENT, or a “deferral,” to the government.
The government’s obligation to defray the cost of deferrals is called a “refundable offset.”
A refinance reduces the cost to the business of paying for deferrments, but it does not reduce the cost the business would otherwise have incurred.
Deferrals must be paid for in the same year they are made, so if a business makes a profit from a year-end payment and forgets to repay the money within that year, the taxpayer must take a refundable offset.
Business owners can defray their costs with defrayements and other government payments.
The Federal Reserve, for example, allows its financial institutions to pay interest on its own capital.
When interest rates are low, banks can offer loans to small businesses to help offset the cost.
Business and individual owners can make defrayMENTS to their businesses through defrayEMENTs.
Deferments can be made to offset government expenses by selling goods and services to consumers or selling equipment to companies.
A defraylement can also be made by buying back a business’s shares in the business.
For more information on defrayals, see the Defrayments section of the Tax Foundation’s Tax Foundation Tax Guide.
For a more complete explanation of defrays, see Defrayement Costs: How to Calculate DefrayMENTS.
What is a business expense?
A business expense is a cost that is paid by a taxpayer to a government agency or entity for services.
The amount a taxpayer pays to the federal government for the use of the services varies.
The total cost of the business expense generally includes: Costs of capital and equipment (e.g., computers, supplies, software, etc.)