headware[at]aol.com (headware) wrote:

- quote -

Thanks to everyone for all the of helpful responses.

Dave

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"headware" <headware[at]aol.com> wrote:

- quote -

These words are used inter-changeably.

mike lewis, CPA

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headware[at]aol.com (headware) writes:

- quote -

There is none. "Write off" is not a technical tax term, but
it seems to connote some sort of reduction in taxable
income, which could also be called a deduction. Just as
"loophole" means "favorable tax law provision that doesn't
benefit me," there's really nothing there.

Phil Marti
Topeka, KS

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headware <headware[at]aol.com> wrote:

- quote -

The mind of the beholder.

MTW

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"headware" <headware[at]aol.com> wrote

- quote -

The spelling?

But seriously, the only real differences are between a tax
credit, and a deduction/write-off. I would consider the
terms "deduction" and "write-off" to be the same.

Deductions or "write-off" reduces your income. So if you
have $100,000 of income and $20,000 in deductions
(write-offs) your taxable income is now $80,000. Deductions
or "write-offs" only reduce your taxes by the amount of the
deduction/write-off times the tax rate. A $20,000
deduction/write-off at the 20% tax rate results in a tax
reduction of $4,000.

A tax credit however, reduces dollar for dollar your tax
bill. So if your total taxes were $8,000 and you had a
$1,000 tax credit, your taxes would only be $7,000.

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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What's the difference between a write-off and a deduction?

Dave

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