Q: What’s a tax write-off? How does it benefit you if you’re a business owner? – Ale
A: Great question! With tax season right around the corner, I’m sure many business owners and individuals like yourself are asking themselves what exactly a tax write-off is and how it benefits them.
Generally speaking, a tax deduction, or “write-off,” is a reduction of the gross amount of income that is used to determine tax. A write-off is typically a deducted expense from your taxable income. For business owners, the simplest way to think about the benefits of tax write-offs is this: the more legitimate write-offs you can claim, the less profits (or income) will be taxed, therefore leaving more money in your pocket. It is important for business owners to keep track of their write-offs throughout the year and always double check with IRS code to ensure proper tax filing come tax season.
What you can and cannot write-off can get pretty confusing. Check out this simple illustration by our friends over at TurboTax:
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