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tax-deductible Definition

tax·-deductible (taks′dē dukt′ə bəl)

adjective

that is allowed as a deduction in computing income tax

tax deductible Finance Definition

Refers to an expense that can be deducted from income on which a person pays taxes. Individuals can deduct expenses such as mortgage interest payments and charitable contributions. Medical expenses can be deducted if they exceed 7.5 percent of the taxpayer’s adjusted gross income for the year. Contributions to Individual Retirement Accounts can be deducted from taxes by people earning below a certain amount of money. Businesses can deduct virtually all of their operating expenses from the income that they earned in order to reduce their tax bill. Tax deductions reduce taxes owed only by the amount of the taxpayer’s tax bracket. For example, a taxpayer in the 28 percent bracket could receive a 28 cent benefit for each $1 of a tax deduction.

tax-deductible Usage Examples

Modifies a noun

  • donation: Can tax-deductible donations be used to lobby against government policy?
  • expense: READERS LIVES: Nanny state By: Real Business Jacqueline de Baer on why nannies should be a tax-deductible expense.
  • contribution: Employers also benefit from the tax-deductible contributions to the plan.
  • benefit: Incorporating or forming an LLC helps protect personal assets and provides tax-deductible benefits for employees and owners.
  • gift: The American Trust for Oxford University can accept tax-deductible gifts from foundations that have been established by business corporations.
  • account: On one side a tax-deductible account administrative services for.

Modifying Another Word

  • fully: Are fully tax-deductible what you're doing give me a a loan on.
  • not: Consumer loan interest is not tax-deductible, whereas home equity loan interest is.
  • usually: However, there are agents to do most of that, and their fees are usually tax-deductible.
  • therefore: The trusts were introduced on the principle that encouraging employe motivation is a business expense ( and therefore tax-deductible ).