Why are business expenses deductible from income, but someone’s basic living expenses aren’t deductible from personal income?
In: Economics
Everyone here is making this more complicated than it needs to be. The baseline for taxes is that all income is taxable. Tax deductions and credits exist because the government is trying to get you to do something. They want you to buy houses, go to college, and save for retirement. They can’t force you to do those things, but they can give you a tax deduction/credit as an incentive. Business deductions are no different. They want you to start a business and succeed, so they offer a bunch of deductions to help you do that. There’s no need to incentivize you to pay for basic living expenses, so they won’t.
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