Nice round numbers: say I perform a job that gets $1000 gross (call this g
) in which I incur $100 in expense (call this e
). The expense is fully deductible. Assume my marginal tax rate is 25% (call this r
).
When I'm figuring how much that job nets, do I use $75 (e * (1-r)
) for the expense?
Is $675 (g * (1-r) - e
) my net earnings (after tax)?
Similarly for household deductible expenses (e.g. energy efficiency) that will save money, etc.