Investopedia

Continue to Site »

Deduction

Filed Under »
Dictionary Says

Definition of 'Deduction'

Any item or expenditure subtracted from gross income to reduce the amount of income subject to tax.

Also referred to as "allowable deduction".
Investopedia Says

Investopedia explains 'Deduction'

For example, if you make $40,000 and you have a deduction for $1,000, then your taxable income is reduced to $39,000.

Articles Of Interest

  1.

    Tax-Saving Advice For IRA Holders

    Be informed about benefits and deductions that may apply to you and avoid costly mistakes on your return.

  2. Deducting Your Donations

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

  3. Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.

  4. Tax Deductions On Mortgage Interest

    If you're a homeowner, this is one item you want to understand and use on your return.

  5. Don't Put Off Your Year-End Tax Plan

    From sales tax deductions to credit reports, check out what items should be on your financial checklist.

  6. Top Tax Deductions For Brokers

    If you are paying out of pocket, you can make your business expenses work for you at tax time.

  7. Traditional IRA Deductibility Limits For 2011

    Find out where you can take a tax deduction on the contributions you make.

  8. Preparing Your Finances From Natural Disasters

    Use these easy tips to protect your financial interests from natural disasters.

  9. Top 9 Solutions To An Unexpected Tax Bill

    Finding out you owe when you expected a refund is a nasty shock. Find out how to cope.

  10. Tax Deductions For Rental Property Owners

    Besides creating ongoing income and capital appreciation, real estate provides deductions that can reduce the income tax on your profits.
comments powered by Disqus
Marketplace
Hot Definitions

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center