And tax deductions on a loss are still a loss. Tax write-offs are a partial mitigation. They’re taken off income, not directly from taxes.
If your tax rate is 25% and you write off a $100 loss, you still lose a net $75. Yeah, if you make negative money you may avoid some taxes entirely, but not all. There’s still payroll tax, property tax, sales tax, and more that are isolated from corporate income tax.
A write-off will never make a company that’s losing money before taxes profitable. They just soften the blow.
And tax deductions on a loss are still a loss. Tax write-offs are a partial mitigation. They’re taken off income, not directly from taxes.
If your tax rate is 25% and you write off a $100 loss, you still lose a net $75. Yeah, if you make negative money you may avoid some taxes entirely, but not all. There’s still payroll tax, property tax, sales tax, and more that are isolated from corporate income tax.
A write-off will never make a company that’s losing money before taxes profitable. They just soften the blow.