> If you're operating a business as an individual (sole proprietor), you deduct expenses and only pay taxes on profits. You can only (legally) deduct business

> If you're operating a business as an individual (sole proprietor), you deduct expenses and only pay taxes on profits. You can only (legally) deduct business expenses, not just all expenditure. For example (where I work) you can deduct a cost for a uniform if it’s required for work. But you can’t deduct the cost of a new suit.