Tax deductions are subtractions from income In the case of student loans, some tax filers may be able to deduct some interest from income Some tax filers will do this when they "itemize" their tax deductions However, tax filers who do not itemize will also be able to deduct interest on student loans
An expenditure of other cost that, if itemized on the tax return, may be subtracted from gross income in determining income tax Most, but not all, employee benefits costs are deductible See also excludable
A reduction of total income before the amount of income tax payable is calculated
a reduction in the gross amount on which a tax is calculated; reduces taxes by the percentage fixed for the taxpayer's income bracket
An expense the Internal Revenue Service allows a taxpayer as a reduction against adjusted gross income (AGI) A deduction reduces taxes only by the percent of a taxpayers tax bracket Examples of allowable deductions include charitable contributions, state and local taxes, and some interest expense
a tax deduction is a sum of money that may be subtracted before the taxpayer computes his or her taxable income