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deduction definition - finance
An expense that is subtracted from taxable income in order to reduce the amount of income tax that has to be paid. Charitable donations and business expenses, such as entertainment expenses and office supplies, are examples of items that can be deducted.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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