Expenses versus capital expenditures

Under the U.S. tax code, businesses expenditures can be deducted from the total taxable income when filing income taxes if a taxpayer can show the funds were used for business-related activities, not personal or capital expenses (i.e., long-term, tangible assets, such as property). Capital expenditures either create cost basis or add to a preexisting cost basis and cannot be deducted in the year the taxpayer pays or incurs the expenditure.

Source: Wikipedia — Expenses versus capital expenditures (CC BY-SA 4.0)