That just means you’re not paying taxes on the income. It’s not like you get the entire $700 back in taxes, because your tax rate probably isn’t 100%. If you pay 30% in taxes, (no clue what you actually pay), writing off the $700 would simply mean you pay $210 less on your taxes.
You are allowed to deduct the money you spent on union dues from your income, thereby lowering your taxable income. So on that portion of income that you deducted, you don’t pay taxes. That’s how all deductions work.
I don’t know if tax deductible means the same thing in Australia, but they’re also deductible in Canada. That means that you don’t pay tax on the money you paid in dues, but you don’t get it back.
In Australia, Union fees are tax deductible.
They don’t cost you anything in the end.
Thats not how tax deductions work.
That just means you’re not paying taxes on the income. It’s not like you get the entire $700 back in taxes, because your tax rate probably isn’t 100%. If you pay 30% in taxes, (no clue what you actually pay), writing off the $700 would simply mean you pay $210 less on your taxes.
Union dues aren’t an income.
The tax deduction is deducted from your taxable income, is what he said. His math checks out.
Explained differently: A union membership costing 700 only costs you 490, assuming your tax is 30% and that it is deductible where you live.
Meanwhile, the game console still costs 700.
You are allowed to deduct the money you spent on union dues from your income, thereby lowering your taxable income. So on that portion of income that you deducted, you don’t pay taxes. That’s how all deductions work.
I don’t know if tax deductible means the same thing in Australia, but they’re also deductible in Canada. That means that you don’t pay tax on the money you paid in dues, but you don’t get it back.