deductible

adjective
de·​duct·​ible | \ di-ˈdək-tə-bəl How to pronounce deductible (audio) , dē- \

Definition of deductible

 (Entry 1 of 2)

: allowable as a deduction expenses that are deductible from taxable income

deductible

noun

Definition of deductible (Entry 2 of 2)

: a clause in an insurance policy that relieves the insurer of responsibility for an initial specified loss of the kind insured against also : the amount of the loss specified in such a clause

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Other Words from deductible

Adjective

deductibility \ di-​ˌdək-​tə-​ˈbi-​lə-​tē How to pronounce deductibility (audio) , dē-​ ; \ noun

Examples of deductible in a Sentence

Adjective The trip was deductible as a business expense. Noun I have an insurance policy with a $1,000 deductible.
Recent Examples on the Web: Adjective Florida's Tax Credit Scholarship lets companies make tax-deductible contributions that funds vouchers to private schools for low-income students. Jordan Valinsky, CNN, "Major bank pulls support for Florida voucher program over LGBTQ discrimination report," 29 Jan. 2020 The Bransons were ready to cover the full deductible for any emergency that might arise. Markian Hawryluk And Heidi De Marco, chicagotribune.com, "Nothing to sneeze at: The $2,659 bill to pluck doll’s shoe from child’s nostril," 2 Dec. 2019 There is no deductible or service fee and no limit on the coverage. Kathleen Pender, SFChronicle.com, "San Francisco deal offers water and sewer insurance: What homeowners need to know," 25 Jan. 2020 Starting July 2, Michigan drivers who are on Medicare or have commercial health insurance that covers car crashes (and with a per-person deductible no higher than $6,000) can choose to completely opt out of no-fault medical benefits. Jc Reindl, Detroit Free Press, "Survey finds some Michigan drivers want to keep buying no-fault insurance," 22 Jan. 2020 Mortgage insurance deduction: For those who are required to pay personal mortgage insurance (PMI) on their home or vacation homes, those payments are once again deductible through 2020 — and retroactive to 2018. NBC News, "Most Americans can file their tax returns for free. Do you qualify?," 22 Jan. 2020 In late 2019, the Salt Lake Tribune became the first major metropolitan daily newspaper in the United States to be granted 501(c)(3) status by the IRS, allowing supporters to make tax deductible donations to the paper to help keep it afloat. Katie Pellico And Brian Stelter, CNN, "The Salt Lake Tribune's switch to nonprofit status may inspire other newspapers to do the same," 10 Jan. 2020 Lawmakers said the stipend is needed because changes in federal tax law mean relocation expenses are no longer deductible from federal taxes, and lawmakers feared an inability to convince staffers to move to Juneau during session. James Brooks, Anchorage Daily News, "Legislative Council votes to put robot cameras in Alaska Capitol," 20 Dec. 2019 Gjersvig cited the example of someone who purchases a bronze plan with a $10 monthly premium but a high deductible. Stephanie Innes, azcentral, "Arizona enrollment in Obamacare is down by 17% and time is running out," 13 Dec. 2019 Recent Examples on the Web: Noun The gross receipts fee that starts at $900 is tax deductible for both, said San Francisco CPA Richard Pon. Kathleen Pender, SFChronicle.com, "California freelancers: What to do if a client tells you to form an LLC," 8 Feb. 2020 Human Resources Director Steve Kilo said health insurance deductibles for union and nonunion workers range from $100 to $500 for singles and $200 to $1,000 for families. Bob Sandrick, cleveland, "Strongsville’s nonunion workers receive 2.5 percent raises in 2020," 3 Feb. 2020 Under current law, amounts contributed to these accounts are often fully tax deductible. Laura Saunders, WSJ, "After Stretch IRAs, What Retirement Breaks Could Congress Chop Next?," 17 Jan. 2020 These plans are both tax deductible for employers and tax-free for employees. Karl W. Smith | Bloomberg, Washington Post, "Save Obamacare’s Cadillac Tax," 17 Dec. 2019 Texans bear among the highest cost burden in the U.S. for their insurance, the Commonwealth Fund reports, spending 12% or more of their income on premiums and deductibles. Nina Martin, ProPublica, "The Extraordinary Danger of Being Pregnant and Uninsured in Texas," 8 Dec. 2019 Also, make sure your contribution is tax deductible. Leada Gore | Lgore@al.com, al, "Giving Tuesday 2019: What you need to know; don’t get scammed when donating," 3 Dec. 2019 The fund is registered as a 501c3 charitable organization, meaning that donations are tax deductible. Jennifer Fisher, chicagotribune.com, "Lincolnwood’s angel fund honors tireless volunteer, good neighbor Harice Leavitt," 24 Oct. 2019 Donations are tax deductible and all proceeds support the museum; call 781-897-1751 or e-mail gbtmuseum@gmail.com to arrange a pickup or drop-off of items. Corey Dockser, BostonGlobe.com, "The fight for women’s suffrage, barn sale, and free music classes," 21 Aug. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'deductible.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of deductible

Adjective

1856, in the meaning defined above

Noun

1929, in the meaning defined above

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Time Traveler for deductible

Time Traveler

The first known use of deductible was in 1856

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Statistics for deductible

Last Updated

12 Feb 2020

Cite this Entry

“Deductible.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/deductible. Accessed 21 Feb. 2020.

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More Definitions for deductible

deductible

adjective

Financial Definition of deductible

What It Is

In the finance world, deductible is usually short for tax-deductible, which refers to an expense that reduces the amount of income that is subject to tax.

In the insurance world, a deductible is a required payment from the insured to the insurer in order to trigger coverage.

How It Works

For example, let's assume John Doe pays $10,000 for mortgage interest last year. He and his wife earned $150,000 from their jobs last year. Based on their circumstances, they can get a deduction for the mortgage interest (meaning they can deduct it from their taxable income). As a result, they must pay federal income tax on $150,000 - $10,000 = $140,000.

Anything that is deductible has a special financial value. In our example, if that mortgage interest hadn't been deductible, John Doe would have paid income tax on that $10,000 of income. If he's in the 28% tax bracket, that could amount to $2,800. Thus, the fact that mortgage interest is deductible saves him $2,800 in taxes.

Why It Matters

When things are deductible, they lower a person's tax bill, which is why taxpayers invest time in seeking out deductions and structuring transactions to maximize those deductions. There are hundreds of different types of tax deductions, though some deductions are available only to people in certain income ranges (typically under $100,000 to $150,000) and most are available only to people in certain circumstances or companies in certain industries.

Source: Investing Answers

deductible

adjective
How to pronounce deductible (audio)

English Language Learners Definition of deductible

 (Entry 1 of 2)

: able to be subtracted from an amount of money

deductible

noun

English Language Learners Definition of deductible (Entry 2 of 2)

US : an amount of money that you have to pay for something (such as having your car fixed after an accident) before an insurance company pays for the remainder of the cost

deductible

adjective
de·​duc·​ti·​ble | \ di-ˈdək-tə-bəl How to pronounce deductible (audio) \

Legal Definition of deductible

 (Entry 1 of 2)

: allowable as a deduction

Other Words from deductible

deductibility \ -​ˌdək-​tə-​ˈbi-​lə-​tē How to pronounce deductibility (audio) \ noun

deductible

noun

Legal Definition of deductible (Entry 2 of 2)

: a clause in an insurance policy that relieves the insurer of responsibility for an initial specified loss of the kind insured against also : the amount specified in such a clause — compare franchise sense 4a

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More from Merriam-Webster on deductible

Rhyming Dictionary: Words that rhyme with deductible

Spanish Central: Translation of deductible

Nglish: Translation of deductible for Spanish Speakers

Britannica English: Translation of deductible for Arabic Speakers

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