Deduction


Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia, Wikipedia.
Related to Deduction: tax deduction

Deduction

An expense that is allowable as a reduction of gross taxable income by the IRS e.g., charity donations.

Deduction

An amount of money that one may subtract from one's gross annual income when calculating one's income tax liability. A common misconception about tax deductions is that they represent a dollar-for-dollar reduction of one's tax liability. Rather, a deduction removes a certain dollar amount from the income the IRS uses to calculate the percentage of one's income that is owed in taxes. Common deductions are charitable contributions, business expenses, and interest on mortgages. See also: Tax credit.

deduction

An expenditure that may legally be used to reduce an individual's income-tax liability. Potential deductions of particular interest to investors are expenditures for subscriptions to financial publications, a lock box for storing securities, and computer software for investment-related activities. These deductions, combined with employee business expenses and miscellaneous deductions, may be subtracted from a person's taxable income only to the extent their total exceeds 2% of that person's adjusted gross income. Interest paid on loans used to finance investments is deductible only against investment income. Also called itemized deduction, tax deduction. See also charitable contribution deduction.

Deduction.

A deduction is an amount you can subtract from your gross income or adjusted gross income to lower your taxable income when you file your income tax return.

Certain deductions, such as money contributed to a traditional IRA or interest payments on a college loan, are available only to taxpayers who qualify for these deductions based on specific expenditures or income limits, or both.

Other deductions are more widely available. For example, you can take a standard deduction, an amount that's fixed each year. And if your expenses for certain things, such as home mortgage interest, real estate taxes, and state and local income taxes, total more than the standard deduction, it may pay for you to itemize deductions instead.

However, if your adjusted gross income is above the limit Congress sets for the year, you may lose some of or all these deductions.

Deduction

An amount that may be subtracted from income that is otherwise taxable.
References in classic literature ?
My deduction is," replied Villefort, "that my father, led away by his passions, has committed some fault unknown to human justice, but marked by the justice of God.
I could not help laughing at the ease with which he explained his process of deduction.
You may not be aware that the deduction of a man's age from his writing is one which has brought to considerable accuracy by experts.
A brilliant piece of rapid deduction," said Father Brown; "but had he got a gun?
Morland was himself patron and incumbent, of about four hundred pounds yearly value, was to be resigned to his son as soon as he should be old enough to take it; no trifling deduction from the family income, no niggardly assignment to one of ten children.
In all seriousness--without meaning to be frivolous--without meaning to be irreverent, and more than all, without meaning to be blasphemous,--I state as my simple deduction from the things I have seen and the things I have heard, that the Holy Personages rank thus in Rome:
A deduction must be made from the opinion which even the wise express of a new book or occurrence.
The household at the Abbey Grange were much surprised at our return, but Sherlock Holmes, finding that Stanley Hopkins had gone off to report to headquarters, took possession of the dining-room, locked the door upon the inside, and devoted himself for two hours to one of those minute and laborious investigations which form the solid basis on which his brilliant edifices of deduction were reared.
Along that line of thought such a deduction is indubitable, as indubitable as the deduction Voltaire made in jest (without knowing what he was jesting at) when he saw that the Massacre of St.
There could have been but a single deduction in the mind of the Mahar--there were other worlds than Pellucidar, and the gilak was a rational being.
I'll give about eight thousand with a deduction on account of the glades.
Joe exploded, then waited in silence for the deduction to arise in his brain.