When businesses file their income tax return, they are able to write off expenses incurred to run the business and subtract them from their revenue to determine their taxable income. So, if you spent money on dinner to take out a client, a portion of that expense acts as a write-off against your business income because the cost of the dinner is a business-related expense.
Tax write-offs simply lower an individual's or business's taxable income, thus the tax liability. For example, imagine your business earns $500,000 in revenue but spends $250,000 on payroll, utilities, rent, inventory and other operating costs. When you file your income tax, you report the income and the expenses, and as a result of the write-offs, your taxable business income is only $250,000.