It's easy to confuse tax deductions with tax credits. How tax deductions compare to tax credits $100 x 25% = $25, so that's the amount you're saving on your taxes. Say your tax rate is 25%, and you just bought $100's worth of work supplies, which are fully tax deductible. To calculate how much you're saving from a write-off, just take the amount of the expense and multiply it by your tax rate. (Needless to say, itemizing only makes sense if the amount you spent on charitable contributions, medical bills, and the like ends up exceeding than the standard deduction.) You'll have to choose between taking these write-offs individually - itemizing them - or taking the standard $12,550. In 2021, it's $12,550 for single filers, $25,100 if you're married filing jointly, and $18,800 if you're a head of household.) (The amount depends on your filing status. Keep in mind: Unlike business expenses, these itemized personal deductions trade off with the standard deduction, a set dollar-amount that all American taxpayers can choose to write off.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |