• Saledovil@sh.itjust.works
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    1 year ago

    My understanding is that tax write-offs are deducted from the revenue, as in profit is revenue - expenses - write-offs, with different things being written of over different periods of time. So, let’s say vehicles are written off over 8 years, and I buy a truck for 40,000$, I can deduct 5,000$ each year from my revenue, meaning my taxable profits are 5,000$ less each year.

    • chiliedogg@lemmy.world
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      1 year ago

      Whether a multi-year or single-year write-off, it’s still coming off taxable income, not taxes owed.

      That truck doesn’t become free. If your tax rate is 25% and you manage to write it off at 100%, you saved 10 grand in taxes. Which is nice if you need the truck, but if you don’t actually need it you’ve actually wasted $30,000.