Deducting Business Expenses

by Robert
(Colorado Springs)

How does deducting expenses work? If I make 50,000 gross income and claim 10,000 for business expenses, does that mean I only pay taxes on 40,000? Is the 10,000 I claimed as business expenses free money back?

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May 01, 2011
Business Expense Deductions
by: Steph

When you deduct business expenses against your gross income, you end up with net income that is then taxable to federal and state(if applicable). In addition to the fed and state tax you will also owe self-employment tax which is social security and medicare.

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