"I'll Just Write It Off."

A tax write-off lowers the income you are taxed on, but it does not hand you back the dollars you spent. Here is the difference on a $20,000 expense.

What People Think

$20,000

In tax savings

Federal taxes saved = $20,000

What It Actually Does

$20,000 income reduced

$180,000

Adjusted gross income

From $200,000 gross

Federal taxes saved = $6,400

Spending $20,000 to save $6,400 still costs you $13,600. A write-off is a discount, not a refund.

Illustrative only: single filer, 2025, $20,000 above-the-line deduction at a 32% marginal federal rate. State taxes and individual circumstances will change the result.