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

Other Words from deductible More Example Sentences Learn More about deductible

Keep scrolling for more

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

Democratic lawmakers in several states have passed workarounds for the limit, in part by trying to reclassify state tax payments as charitable 'donations' that can remain deductible under the federal tax code. — Tory Newmyer, Washington Post, "The Finance 202: The biggest banks are about to get their own relief in Washington," 24 May 2018 The dividends are deductible to the cooperative, which pays the corporate rate on anything retained for reinvestment in the business. — Lynnley Browning, Bloomberg.com, "Rich People Can Now Get Tax Breaks Meant for Farmers," 6 Mar. 2018 Your 2017 mortgage interest may be fully deductible. — Erin Arvedlund, Philly.com, "Philly's Super Bowl is over….Now it's 2017 tax filing season," 2 Feb. 2018 The interest can be fully deductible up to $100,000. — Ramona Ortega, ELLE Decor, "6 Tips To Make The Most Of Your Home Improvement Tax Benefits And Tax Deductions," 3 Apr. 2017 Both can be good fits for high-deductible health care insurance , McClanahan says. — Liz Weston, The Seattle Times, "Liz Weston: How to save money on health care," 22 Oct. 2018 The number of Americans with high deductible health plans has soared in recent years. — Sarah Gantz, Philly.com, "Have a high deductible insurance plan? Knowing the cash prices could save you money," 20 Feb. 2018 The state ought to make those costs doubly deductible -- essentially investing in the exact retraining for which there are jobs. — Amy Chance, sacbee, "'Not all machines are evil,' and other thoughts on California's changing economy," 2 July 2018 My office accounts for 7 percent of the square footage of our house, which makes 7 percent of some expenses deductible. — Tim Gray, New York Times, "Plumbing Problem Shows Powers and Limits of 3 Tax Programs," 23 Feb. 2018

Recent Examples on the Web: Noun

Potomac Watch Podcast Medicare for All would finance health care through taxes instead of insurance premiums, deductibles and co-pays. — The Editorial Board, WSJ, "The Price of BernieCare," 11 Oct. 2018 But a growing number of people are being asked to pay for a greater share, sometimes with a deductible. — Katie Thomas, BostonGlobe.com, "What does a drug cost? It depends on where you live.," 7 July 2018 In the wake of the 2008 financial crisis, many families were hard-pressed to meet their soaring health insurance deductibles. — John Tozzi And Zachary Tracer, latimes.com, "How sky-high deductibles broke the U.S. health insurance system," 26 June 2018 The bad news: If you get hit by a storm, your policy won't pay until the amount of damage exceeds that deductible. — Dylan Jackson, miamiherald, "Now is the time to evaluate your hurricane insurance. It isn't as simple as you think.," 18 June 2018 For more information and a tax deductible contribution to assist families in Wayne, Oakland and Macomb counties go to salmich.org. — Brendel Hightower, Detroit Free Press, "Things to do in metro Detroit for the week of June 10," 11 June 2018 Laurinda Bernardo, 65, of New Britain, said rising deductibles have caused stress for her family. — courant.com, "Costs And Access Still Barriers To Health Care, Survey Finds," 6 June 2018 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

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.

Keep scrolling for more

Learn More about deductible

Dictionary Entries near deductible

deduction new for old

deductive

Statistics for deductible

Last Updated

3 Dec 2018

Look-up Popularity

Time Traveler for deductible

The first known use of deductible was in 1856

See more words from the same year

Keep scrolling for more

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

See the full definition for deductible in the English Language Learners Dictionary

deductible

adjective

de·duc·ti·ble | \di-ˈdək-tə-bəl

Legal Definition of deductible

(Entry 1 of 2)

: allowable as a deduction

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