Tax Deduction: A direct dollar-for-dollar reduction in tax allowed for expenses such as child care and R&D for building low-income housing. Compare tax deduction.

 

Related Words

Tax Deduction: A direct dollar-for-dollar reduction in tax allowed for expenses such as child care and R&D for building low-income housing. Compare tax deduction.

Tax-Deferred Retirement Plans: The effect of creating a tax deduction, such as charitable contributions and mortgage interest.

Mortgage Interest Deduction: A federal tax deduction for interest paid on a mortgage used to acquire, construct, or improve a residence.

Tax Credit: A tax credit is an amount you can subtract from the tax you would otherwise owe. Unlike a deduction or exemption, a credit is a dollar-for-dollar reduction of your tax bill. For example, if . . . View Full Definition

Marital Deduction: A tax deduction that allow spouses to transfer unlimited amounts of property to one another.

Tax Exemption: An amount that a taxpayer who meets certain criteria can subtract from taxable income. Examples include exemptions for each dependent or for life insurance proceeds. (See Tax Credit, Tax Deduction.)

Tax Exempt: Some investments are tax exempt, which means you don't have to pay income tax on the earnings they produce. For example, the interest you receive on a municipal bond is generally exempt from . . . View Full Definition

Abusive Tax Shelter: A limited partnership that the IRS judges to be claiming tax deductions illegally.

Tax Deed: An instrument, similar to a certificate of sale, given to a purchaser at a tax sale.

Tax Deferral Option: An expense that a taxpayer is allowed to deduct from taxable income.