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
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.