In general you pay taxes on your income. For every dollar you make a certain percentage is paid in taxes, how big of a percentage depends on how much income you have already made. Tax deductible expenses though can be withdrawn from your income before tax. So for example if you make a dollar and spend it on a candy bar then you might have to pay a nickel in taxes. But if you make a dollar and donate it to a charitable organization then you do not have to pay any taxes.
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