Let's say someone makes 40k at their w2 employee job. But they want to start a business, so they invest some money into equipment ($8000) the first year so they can actually start their business. Does that mean their taxable income should be less (federal/state/local). Assume $3000 in side business income.
Does that mean their taxable income would be around $40,000 + $3000 - $8000 = $35000?