|
Note: The Center For Debt Management suggest you Monitor Your Credit Report regularly. Lexington Law Firm is our preferred choice for fast and effective credit repair. Lexington Law
is reputable and is a member of the BBB. They have a satisfactory record with the bureau.
Write-Off: Uncollectable Debt
A write-off may refer to either an accounting write-off or an income tax write-off. It is also a term commonly used in vehicle insurance to describe a vehicle which is cheaper to replace than to repair, known in the U.S. as being a totaled car.
Accounting
In business accounting, the term write-off is used to refer to an investment (such as a purchase of salable goods) for which a return on the investment is now impossible or infeasible. The item's potential return is thus canceled and removed from ("written off") the business's balance sheet. Common write-offs in retail include spoiled and damaged goods.
Banking
Similarly, banks write-off bad debt that is declared uncollectable (such as a loan on a business that is now defunct), removing it from its balance sheet. It is also referred to as a "charge-off."
Income Tax
In income tax calculation, a write-off is the itemized deduction of an item's value from one's taxable income. Thus if a person has a taxable income of $50,000 per year, a $100 telephone for business use would lower the taxable income to $49,900. If that person is in a 25% tax bracket, the tax due would be lowered from $12,500 to $12,475. Thus the net cost of the telephone is $75 instead of $100.
The phrase "writing off" is sometimes used in a way that suggests the item will be free. The value of the item is only deducted from taxable income, not from the tax itself. The term is also loosely used to refer to an item which is intended for personal use but which will be deducted ("written off") as a business expense. Some individuals attempt to amass large numbers of "write-offs" in order to reach a lower tax bracket and increase the effective size of the deductions.
Note: The Center For Debt Management suggest you Monitor Your Credit Report regularly. Lexington Law Firm is our preferred choice for fast and effective credit repair. Lexington Law
is reputable and is a member of the BBB. They have a satisfactory record with the bureau.
Need to Refinance or Find a Great Home Loan? Go to The Mortgage Center
|
Click Below To Check Out More Financial Resources
|
|
|
|
|
The Center For Debt Management™
Helping Consumers Save Money and Reduce Debt Is Our Only Business!™
We invite you to explore the sectors listed below. We promise that you'll find exceptional values, offers and resources in which to reduce your living expenses and to enjoy life!
|
Debt Management and Financial Services! The Internet's oldest and most comprehensive debt management
agency! Resources for debt management, consumer credit counseling, debt consolidation, debt reduction settlements, legal aid, financial aid, loans and financing, credit repair, credit reports, insurance quotes, income sources, tax assistance, and more.
Established in 1989 and serving the online community since 1992!
|
Write-Off: Uncollectable Debt, Charge-Off
|
|
