tax deduction

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Tax deduction

An expense that a taxpayer is allowed to deduct from taxable income.

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.

tax deduction

See deduction.

tax deduction

An expense allowed as a reduction of taxable income.The most common individual deductions are for home mortgage interest,ad valorem and sales taxes,moving expenses associated with a job, charitable giving, and health-care costs. Virtually all expenses associated with income-producing property are deductible, including noncash expenses such as depreciation. Virtually all operating expenses for a business are deductible, except that capital expenditures (a new roof, expansion of building, purchase of equipment) must be capitalized and depreciated over time unless falling within the Section 179 limits. Section 179 lets a taxpayer deduct as expenses certain things that would otherwise have to be capitalized.

References in periodicals archive ?
She said firms should also be aware that small gifts to clients were tax deductible.
The "charitables" - nonlobbying groups like the Urban League and Brookings Institution - have long been able to attract individual donors more easily because donations are tax deductible.
This declaration ensures that new funds and qualifying existing funds established for the relief of people in communities affected by the bushfires, can receive tax deductible donations.
Take for example: a 50-year old professional has maxed out his retirement plan and decides to make a onetime contribution of $50,000 to an NCF Flexible Deferred Tax Deductible Annuity[TM].
My clients who have received the checks are putting the dollars in a tax deductible retirement account,'' Fox said.
Before the passage of TRA '86, interest due on loans to finance these types of life insurance policies sold after March 1, 1954, was not tax deductible.
The tax deductible limits for long term care insurance increase as you age according to AALTCI.
Donate appreciated stocks, bonds or mutual funds--the total value of the stock upon transfer is tax deductible and there is no obligation to pay any capital gains taxes on the appreciation.
Depending on your financial situation and the investment vehicle, contributions are tax deductible, while in other vehicles they are not.
Under IRC sections 274(a), 274(d) and 274(k), to be tax deductible, the M&E expenses a company incurs on behalf of clients, customers or employees must be
We can't do that if large sums of tax deductible dollars .
Henry and Harvey would like to defer compensation (rather than increase current compensation) by having Envy make tax deductible contributions to an employee retirement plan; however, they do not want a fixed obligation for contributions nor are they willing to pay the high administration costs associated with many qualified plans.