A tax write-off is an expense that taxpayers are allowed to deduct from their taxable income, reducing their overall tax liability. Common tax write-offs include:
- Business expenses: Costs related to operating a business, such as office supplies, advertising, and employee wages.
- Charitable donations: Contributions to qualified nonprofit organizations.
- Medical expenses: Certain medical and dental expenses that exceed a percentage of adjusted gross income.
Tax write-offs can significantly reduce the amount of tax owed, but they must be legitimate and meet IRS guidelines. Business owners, in particular, can benefit from a wide range of tax write-offs, as they are allowed to deduct most ordinary and necessary expenses incurred in the course of running their business.
Taxpayers should keep detailed records and receipts of all deductible expenses to ensure they can substantiate their write-offs in the event of an IRS audit. Consulting with a tax professional can help maximize available write-offs and ensure compliance with IRS regulations.