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deduction definition - legal

n

A monetary amount that a taxpayer is permitted by law or regulation to subtract from income when determining income tax.
itemized deduction
An expense, such as state and local taxes paid, or annual interest on a mortgage, that is listed on a tax return as a deduction. Includes charitable deductions.
standard deduction
A dollar amount that a taxpayer is permitted by law to subtract from taxable income in lieu of listing itemized deductions.

Webster's New World Law Dictionary Copyright © 2006 by Wiley Publishing, Inc., Hoboken, New Jersey.
Used by arrangement with John Wiley & Sons, Inc.

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