Deduction

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Deduction

That which is deducted; the part taken away; abatement; as in deductions from gross income in arriving at net income for tax purposes.

In Civil Law, a portion or thing that an heir has a right to take from the mass of the succession before any partition takes place.

A contribution to a charity can be used as a deduction to reduce income for Income Tax purposes if the taxpayer meets the requirements imposed by law.

deduction

n. an expenditure which an income tax payer may subtract from gross (total) income to determine taxable income. This is not the same as an exemption which is for one's marital status, age over 65, blindness and number of dependents (e.g. children), which, added together, reduce the tax owed.

References in periodicals archive ?
Teachers still get the $200 federal above-the-line deduction. Alternatively, teacher might consider writing off contributions of supplies to schools as a charitable donation.
This does not mean, however, that only those deductions are properly allocable to U.S.-source gross income.
If you're in a 31% bracket, for example, $100 worth of deductions saves you $31.
Taxpayers who use the standard deduction can use the provision to eliminate an RMD from taxable income and effectively take a charitable deduction, plus the standard deduction.
The act creates a special tax deduction for individuals who provide rent-free housing in their principal residence to dislocated persons for at least 60 consecutive days.
Example: Paul and Diane Brown have always itemized deductions on Schedule A, largely due to the amounts they pay in state income tax and local property tax.
Compare approaches: Tax preparation software makes it easy to determine optimal filing approaches (e.g., taking the standard deduction versus itemizing).
These deductions are subject to the 2% of AGI floor and the 3% overall limitation on itemized deductions.
Old and Existing Law: A donor claiming a charitable donation deduction must maintain reliable written records regarding the donation--regardless of the donation's value or amount.
A taxpayer generally must allocate and apportion these deductions using the section 861 method.
"One thing we plan to do to avoid the AMT is to pay our state and local taxes in January 2004, which will reduce our itemized deductions," explains Thomas Gordon.
In 2001, when CRF last performed its customer deduction analysis, almost 65 percent of respondents indicated that they allow (credit or write-off) between 71 and 100 percent of their deductions after investigation, with an amazing 10 percent allowing over 95 percent of the deductions.