deductible

adjective
de·duct·ible | \di-ˈdək-tə-bəl, 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 \-ˌdək-tə-ˈbi-lə-tē \ 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

What’s more, many employers are moving toward high-deductible plans — an incentive for patients to seek outpatient services, which are generally cheaper than inpatient care. John Dorschner, miamiherald, "The South Florida Hospital War. (It’s all location, location, location) | Miami Herald," 25 Feb. 2018 Kelly said the best healthcare deal the city could find for its workers in 2018 was a high-deductible plan with a health savings account. Bob Sandrick, cleveland.com, "North Royalton contract negotiations with firefighters stall over healthcare," 20 Oct. 2017 People hitting the new $10,000 federal cap on state-and-local tax, or SALT, deductions can transform nondeductible state-tax payments into deductible donations, turning a profit on charity. Richard Rubin, WSJ, "As Treasury Targets Workarounds to Tax Law, Impact May Extend Beyond High-Tax States," 27 June 2018 Tax deductible donations can be made to Harford County Special Olympics, 1552 Bentley Circle, Bel Air, MD 21015 or at tinyurl.com/TeamMD2018. Marleen Van Den Neste, The Aegis, "Harford Highlighters hoop team heading to Seattle for USA Games," 11 June 2018 In that context, even an unmet deductible or copayment can be catastrophic. Shefali Luthra, Washington Post, "When Credit Scores Become Casualties Of Health Care," 9 May 2018 But between his deductible and out-of-pocket costs, his expenses added up. New York Times, "The Price They Pay," 5 Mar. 2018 Finally, when a business owner is ready to retire or otherwise depart the company, the business can make tax-deductible contributions to the ESOP to buy out the departing owner’s shares or have the ESOP borrow money to buy the shares. Tom Cooney And Crystal Faulkner, Cincinnati.com, "Employee Stock Ownership Plans (ESOPs) offer unique benefits and succession planning options," 2 July 2018 Your tax-deductible donation, meant to offset your carbon footprint, supports carbon reduction projects. Jill K. Robinson, SFChronicle.com, "Going green: Can we travel the world without killing the planet?," 21 June 2018

Recent Examples on the Web: Noun

Everything covered under Medicare-for-all will be provided without cost, meaning no fees, no copays, and no deductibles. Ed Kilgore, Daily Intelligencer, "Medicare for All Won’t Bring Medicare to All," 13 July 2018 The Katy ISD Education Foundation is an independent 501(c)(3) organization for which donations are tax deductible to the extent allowed by law. Staff Report, Houston Chronicle, "Foundation funds teacher grants of more than $300,000," 12 June 2018 Check the insurance plan terms to understand the coverage and deductibles. Rebekah L. Sanders, azcentral, "Booking a summer cruise? Here's how to protect your money," 8 June 2018 Those Novartis payments no longer counted toward her family plan’s $8,800 annual pharmacy deductible. Special To The Oregonian, OregonLive.com, "Prescription drug copay help: 2018 changes leave patients paying more," 4 June 2018 These accumulators, which target specialty medicines that are typically more expensive and are often injected or infused, do not count the value of any coupons toward out-of-pocket medicine costs that are applied toward deductibles. Ed Silverman, STAT, "Which drug makers are most vulnerable to a new cost-shifting maneuver?," 18 Apr. 2018 Medicare itself has premiums (for Part B non-hospital coverage and Part D prescription drug coverage, anyway), co-pays, and some deductibles. Ed Kilgore, Daily Intelligencer, "Medicare for All Won’t Bring Medicare to All," 13 July 2018 JPMorgan is effectively eliminating deductibles for workers making less than $60,000 a year. John Tozzi, Bloomberg.com, "Sky-High Deductibles Broke the U.S. Health Insurance System," 26 June 2018 JPMorgan is effectively eliminating deductibles for workers making less than $60,000 a year. John Tozzi And Zachary Tracer, latimes.com, "How sky-high deductibles broke the U.S. health insurance system," 26 June 2018

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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Last Updated

8 Oct 2018

Look-up Popularity

Time Traveler for deductible

The first known use of deductible was in 1856

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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

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)

: 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 \

Legal Definition of deductible 

(Entry 1 of 2)

: allowable as a deduction

Other Words from deductible

deductibility \-ˌdək-tə-ˈbi-lə-tē \ 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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