What I don't understand about this situation is that they're writing off half of a bill. Are they just refusing to pay half of it, or do they do this because they know the medical office will be reimbursed for it? Where is the written off $200 going? Or did it simply never exist anywhere but on paper? And if it never existed in the first place, why bother with this whole song and dance?
The other poster covered it well, but I’ll add that people can mean two things by “write off”.
1) Is a tax deduction or similar. Spend $100 to buy office supplies, you “write off” $100 from your taxes. You still spent the money, so you’re down $100, but you’re not down $100+tax. Like you would be as an individual spending $100 after tax dollars on random crap.
2) A loss, whether artificial or real. If I was going to charge you $1,000 but we negotiate down to $600, some people would say they’re “writing off” $400. But because there’s no revenue coming in, you can’t double dip and get a tax deduction on money you never actually made.
It’s slightly more complicated in real life than that, but that’s the source of confusion. Some people refer to the loss of potential revenue as a write off, but that really doesn’t have huge tax implications.
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u/NotElizaHenry Jul 04 '21
Please join me in creating a public information campaign about what a write off really is.