Deductions
Barron's Accounting Dictionary:
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Deductions
1. itemized deductions, which are deductions from adjusted gross income (agi). Certain personal expenditures are allowed by the Tax Code as deductions from adjusted gross income if they exceed the standard deduction (formerly the zero bracket amount).
Examples include medical expenses in excess of 7.5% ofAGI, interest on home mortgages, real estate taxes, and charitable contributions.
Itemized deductions are reported on ScheduleAof Form 1040.
2. deductions for adjusted gross income, such as employee business expenses and contributions to an IRA pension plan.
3. adjustment to an invoice.
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Deductions
Barron's Law Dictionary:
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Deductions
Amounts allowed to taxpayers under the Internal Revenue Code as offsets against gross income or adjusted gross income. See income, tax deduction.
itemized deductions
deductions allowed under the various provisions of the Code for specific costs or expenses incurred by the taxpayer during the taxable year. These deductions are allowed in computing taxable income. An individual whose adjusted gross income exceeds a specified threshold amount must reduce the amount of otherwise allowable itemized deductions. IRC §63(d).
marital deduction
an amount allowed as a deduction for federal estate and gift tax purposes for certain interests in property transferred to a spouse. The deduction is currently unlimited in amount.
IRC §2056. See also marital deduction.
personal expenses deductions
personal expenses as opposed to expenses for income producing or business expenses. In general, personal expenses are not allowed as deductions, except for certain expenses such as taxes, interest payments, etc., as specifically enumerated in the Internal Revenue Code. IRC §262.
standard deduction
taxpayers who do not itemize their deductions are entitled to a standard deduction, IRC §63(c). The amount of the standard deduction varies according to the taxpayer’s filing status. Taxpayers who are age 65 or older, or who are blind, receive an additional standard deduction amount that is added to the basic standard deduction.
zero bracket amount deduction an amount of income below the amounts at which, according to the tax tables, income taxes must be paid.
itemized deductions
deductions allowed under the various provisions of the Code for specific costs or expenses incurred by the taxpayer during the taxable year. These deductions are allowed in computing taxable income. An individual whose adjusted gross income exceeds a specified threshold amount must reduce the amount of otherwise allowable itemized deductions. IRC §63(d).
marital deduction
an amount allowed as a deduction for federal estate and gift tax purposes for certain interests in property transferred to a spouse. The deduction is currently unlimited in amount.
IRC §2056. See also marital deduction.
personal expenses deductions
personal expenses as opposed to expenses for income producing or business expenses. In general, personal expenses are not allowed as deductions, except for certain expenses such as taxes, interest payments, etc., as specifically enumerated in the Internal Revenue Code. IRC §262.
standard deduction
taxpayers who do not itemize their deductions are entitled to a standard deduction, IRC §63(c). The amount of the standard deduction varies according to the taxpayer’s filing status. Taxpayers who are age 65 or older, or who are blind, receive an additional standard deduction amount that is added to the basic standard deduction.
zero bracket amount deduction an amount of income below the amounts at which, according to the tax tables, income taxes must be paid.
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Mentioned in
Deductions from Gross Income (Dfrom)
(business term)
Excess Itemized Deduction
(in accounting)
Gross Income
(finance term)
Preauthorized Payment
(finance term)
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