eli5: what are tax write offs?

Question

im autistic and have reading disabilities so i dont understand anything google says 🥲

In: 0

Answer 1

You set up a lemonade store.

You buy $40 of lemons. You sell $100 of lemonade.

You got an income of $100. However, you can get a tax-write off for the lemons – you had to buy the lemons in order to make money. You write off $40 of income from the lemons – so you only pay tax on $60.