tax deduction

tax deduction definition - finance
An expense deducted against taxable income that reduces tax liability. Deducting expenses from income reduces taxable income, and thus decreases the amount of tax owed. Tax deductions allow the government to encourage certain behaviors.

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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