what “tax deductible” actually means, practically speaking

Question

I just don’t get it.

In: 3

Answer 1

In general, you get paid, the government takes out income tax on that, and you get to spend what’s left.

For tax-deductible items, you get paid, you spend it on the tax-deductible item, and the government takes out income tax on what’s left. So you pay less tax.