Investopedia

Continue to Site »

Deductible

Filed Under »
Dictionary Says

Definition of 'Deductible'

1. The amount you have to pay out-of-pocket for expenses before the insurance company will cover the remaining costs.

2. An amount subtracted from an individual's adjusted gross income to reduce the amount of taxable income.

Also known as "tax deductible."
Investopedia Says

Investopedia explains 'Deductible'

1. For example, if you get into an accident and your medical expenses are $2,000 and your deductible is $300, then you would have to pay the $300 out-of-pocket first before the insurance company paid the remaining $1,700. However, if your accident only resulted in $300 in medical expenses, then you would pay the $300 deductible and the insurance company would pay nothing.

2. There are many types of expenses you can use to reduce the amount of your taxable income such as healthcare expenses, interest expenses (i.e. mortgages, car loans), legal fees and investment-related expenses. However, for those with brokerage accounts, fees such as commissions paid for trades are not deductible.

Articles Of Interest

  1.

    How To Invest When You're Deep In Debt

    Debt is one of the biggest obstacles that prevents people from investing - but it shouldn't be.

  2. IRA Contributions: Deductions and Tax Credits

    We outline the incentives and help you take full advantage of the benefits.

  3. Will Filing An Insurance Claim Raise Your Rates?

    An accident can mean higher insurance costs - even if it wasn't your fault.

  4. Deducting Your Donations

    Generosity may be its own reward, but some charitable giving also provides personal tax benefits.

  5. College Loans: Private Vs. Federal

    Not all student loans are the same. Know what you're getting into before signing on the dotted line.

  6. Getting Through The Medicare Part D Maze

    Having trouble sorting through your prescription drug coverage options? We offer some solutions to the confusing process of selecting the right Medicare Part D coverage for you.

  7. What Does Medicare Cover?

    Don't assume you're insured. Find out what you can expect from this healthcare program.

  8. Long-Term Care Insurance: Who Needs It?

    No one is immune to the possibility of one day needing long-term care - and the costs can deplete a life savings.

  9. Deducting Disaster: Casualty And Theft Losses

    If you've been a victim, your losses may be deductible. Find out how.

  10. Top Tips For Cheaper, Better Car Insurance

    Accident, theft, vandalism - make sure your coverage will protect you when you need it most.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center