this post was submitted on 11 Feb 2024
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What is a "tax write off"? (self.nostupidquestions)
submitted 9 months ago* (last edited 9 months ago) by tigerjerusalem to c/nostupidquestions
 

Let's say that I have this one movie that is finished that I spent 80 million to make. I decided to "write it off". So when I get to pay my taxes, do I get a 80 million discount?

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[–] [email protected] 2 points 9 months ago* (last edited 9 months ago)

I understand it to mean what's called a "deduction". This is an amount that you are allowed to claim that reduces your taxable income, which reduces the tax you pay. "Writing it off" means claiming the deduction.

Generally speaking, to be a valid deduction, an expense must be necessary and ordinary to running your business. In practice, a valid deduction is whatever your tax authority decides is allowable.

I am answering from the point of view of the Canadian income tax system, but what I describe here is pretty common throughout the world.