tax deduction

American  

noun

1. an expenditure that is deducted from taxable income.

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tax deduction Cultural  

1. An expense, such as a charitable contribution, that can be deducted from one's taxable income. Unlike a tax shelter, a tax deduction does not necessarily take the form of an investment.

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Example Sentences

Funding a new DAF with highly appreciated shares of stock allows the donor to avoid capital-gains taxes while also taking a tax deduction.

From The Wall Street Journal • Apr. 6, 2026

The cap on the state and local tax deduction, or SALT, increased from $10,000 to $40,000.

From The Wall Street Journal • Jan. 25, 2026

Contributions are made with after-tax dollars, meaning you don’t get an up-front tax deduction, but qualified distributions later in life are entirely tax-free.

From MarketWatch • Dec. 29, 2025

With these funds, the donation counts toward a tax deduction in the year the money was contributed to the account, but the donor can decide which organization will receive the gift later.

From MarketWatch • Dec. 1, 2025

We should support Americans who tithe and contribute to charities, but don't earn enough to claim a tax deduction for it.

From State of the Union Address by Clinton, William Jefferson