tax deduction

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Tax deduction

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


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 ?
Two-Life and Multi-generational Tax Deductible Annuities[TM] have been providing secured income streams with substantial tax savings for years.
Though not tax deductible as "charity," donations to industry lobbies are often written off as "business expenses.
It's possible to include spouses and have their premiums tax deductible as well," Slome notes.
The contribution is tax deductible to the corporation as a reasonable and necessary business expense and is not taxable to the employee until it is distributed from the IRA without being rolled over.
Also under no circumstances, no matter the loan, are real estate down payments tax deductible as the article proclaims.
com)-- The cost of long-term health care insurance may be fully tax deductible according to long-term care insurance expert Jesse Slome.
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 .
Bill Will Help Consumers by Making Their Mortgage Insurance Premiums Tax Deductible
Under the new law, passed by Congress and signed by President Bush late last year, private mortgage insurance (PrivateMI) premiums are fully tax deductible for borrowers who buy or refinance a home this year if their adjusted gross income is $100,000 or less.
LTCSelect Plus eliminates the mental illness exclusion, does not exclude pre-existing conditions and meets IRS requirements so that premiums may be tax deductible.