A business expense subtracted from taxable income to lower the tax you owe; also called a deduction.
A write-off is a business expense you subtract from your taxable income, which lowers the tax you owe. It’s the same thing as a deduction. If you earn $70,000 and have $10,000 in legitimate business expenses, you’re taxed on $60,000, not $70,000.
For sellers, write-offs are how you keep self-employment tax and income tax from eating your profit. Software, a portion of a home office, business travel, equipment, and professional education often qualify. The catch: you need records — receipts and a clear business purpose — because a write-off you can’t document is one you can’t defend. For buyers, this rarely applies unless you’re the one hiring contractors, in which case what you pay them is itself deductible.
The common myth is that a write-off is “free money” — it isn’t. It reduces taxable income, so a $1,000 expense saves you your tax rate on $1,000, not the whole $1,000. What actually counts as deductible has real rules, so confirm gray areas with a tax professional and keep your business finances separate.