Definition

Noun: A tax write-off is an official reduction in the taxable income amount reported to the government. This reduction directly lowers the total tax owed, with the specific financial benefit depending on the taxpayer's income tax bracket.

Usage

A tax write-off is an item or expense that the tax code allows a taxpayer to subtract from their gross income when calculating their final tax liability. It is a formal deduction. - Charitable donations can be a valuable tax write-off for many individuals. - The business claimed the new equipment as a tax write-off to lower its tax bill.

Advanced Usage

• "to use something as a tax write-off": This phrase describes the strategic application of an eligible expense to reduce taxable income.
  • Many self-employed professionals use their home office as a tax write-off.

Variants and Related Words

• Tax deduction (n): A more general synonym for a tax write-off; an amount subtracted from gross income.
  • Mortgage interest is a common tax deduction.
• Write off (phrasal verb): The action of deducting an amount for tax purposes or declaring an asset as having no value.
  • The company decided to write off the obsolete inventory.

Synonyms

• Deduction: An amount subtracted from gross income.
• Allowance: (In tax contexts) a permitted deduction.

Related Phrases

• Above-the-line deduction: A deduction subtracted from gross income to calculate adjusted gross income (AGI).
• Itemized deduction: A specific expense that can be listed (itemized) on a tax return to reduce taxable income, as opposed to taking a standard deduction.

Noun

1. a reduction in the gross amount on which a tax is calculated; reduces taxes by the percentage fixed for the taxpayer's income bracket