Tax Deduction
TaxGlossary term
Definition
An expense that can be subtracted from gross income to reduce taxable income. Common deductions include mortgage interest, student loan interest, and charitable contributions.
Related terms
- Tax CreditA dollar-for-dollar reduction in taxes owed. More valuable than deductions, which only reduce taxable income. Examples include Child Tax Credit and Earned Income Tax Credit.
- Itemized DeductionsSpecific expenses that can be deducted from taxable income, including mortgage interest, charitable donations, and medical expenses. Must exceed the standard deduction to be beneficial.
- Standard DeductionA fixed dollar amount that reduces taxable income, available to all taxpayers. For 2026: $16,100 for single filers, $32,200 for married filing jointly.
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