A tax write-off is a legitimate expense that can be deducted from your taxable income on your tax return, effectively reducing the amount of income subject to tax

. It is also commonly called a tax deduction. By lowering taxable income, a write-off decreases the total tax you owe. For example, if you have a taxable income of $50,000 and write off a $100 business expense, your taxable income becomes $49,900, which lowers your tax bill accordingly

. For a business expense to qualify as a write-off, the IRS requires it to be both "ordinary" (common in your line of work) and "necessary" (helpful for your business)

. Common write-offs include costs such as business travel, office rent, equipment, advertising, and business insurance

. It's important to distinguish between tax write-offs and tax credits: write- offs reduce taxable income, while credits directly reduce the tax liability. For example, a $1,000 write-off reduces taxable income, whereas a $500 tax credit reduces the actual tax owed

. In accounting, a write-off can also refer to recognizing that an asset has lost value or is no longer recoverable, such as bad debts or spoiled inventory, which similarly reduces taxable income by increasing expenses

. In summary, a tax write-off lowers your taxable income by deducting allowable expenses, thereby reducing the amount of tax you owe