Tax Benefit

AAA

DEFINITION of 'Tax Benefit'

A tax benefit is an allowable deduction on a tax return intended to reduce a taxpayer's burden while typically supporting certain types of commercial activity. A tax benefit allows some type of adjustment benefiting a taxpayer's tax liability.

INVESTOPEDIA EXPLAINS 'Tax Benefit'

Tax benefits provide an advantage to the taxpayer while typically benefiting another entity. An example of a tax benefit is an energy tax credit; taxpayers can qualify for certain tax credits for installing energy efficient systems in their homes, which benefits the environment while reducing the demand for fuel. Quite often tax benefits may be only available for a certain time period or tax year.

RELATED TERMS
  1. Tax Break

    A tax break is a savings on a taxpayer's liability. A tax break ...
  2. Income Tax

    A tax that governments impose on financial income generated by ...
  3. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  4. Taxes

    An involuntary fee levied on corporations or individuals that ...
  5. Itemized Deduction

    A deduction from a taxpayer's taxable adjusted gross income that ...
  6. After-Tax Income

    The amount of money that an individual or company has left over ...
Related Articles
  1. Tax Credits And Deductions For Parents
    Taxes

    Tax Credits And Deductions For Parents

  2. 5 Tax Credits You Shouldn't Miss
    Taxes

    5 Tax Credits You Shouldn't Miss

  3. Give Your Taxes Some Credit
    Taxes

    Give Your Taxes Some Credit

  4. Cut Employee Stock Option Taxes With ...
    Taxes

    Cut Employee Stock Option Taxes With ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center