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

Keep scrolling for more

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

Eubanks’ family set up a memorial fund in his name and is collecting tax-deductible donations at austineubanks.com. Saja Hindi, The Denver Post, "Columbine survivor and addiction recovery speaker Austin Eubanks died of heroin overdose, autopsy shows," 13 June 2019 Make a tax-deductible donation to achieve your financial goals while helping others, too. Tribune Content Agency, oregonlive.com, "Horoscope for June 4, 2019: Pisces, count your blessings; Cancer, mixed messages may confuse," 4 June 2019 To qualify, instead of claiming deductions for charitable contributions that would have to be reduced by the size of the tax credit, businesses could claim the contributions as ordinary, deductible business expenses. Richard Rubin, WSJ, "IRS Clarification Eases Deduction Limits for Some Business Owners," 5 Sep. 2018 And the boteros, those who work as private taxi drivers, must present receipts to justify all their deductible expenses. Latest news by email The afternoon's latest local news Recaptcha requires verification. Nora Gámez Torres, miamiherald, "Cuba imposes more taxes and controls on private sector and increases censorship on the arts," 10 July 2018 Bunching essentially involves doubling up on certain deductible expenses in one year and skipping them the next. Russ Wiles, azcentral, "Health costs in retirement: 5 things you should know," 22 Apr. 2018 But at companies where the employer covers part or all of their employees’ commuting costs, those subsidies are no longer considered a tax-deductible business expense. Washington Post, "With new tax law, will employers continue to subsidize your commute?," 6 Jan. 2018 For 2017, all state and local income taxes and property taxes are still deductible. Erin Arvedlund, Philly.com, "Philly's Super Bowl is over….Now it's 2017 tax filing season," 2 Feb. 2018 That could help the increasing number of people with high-deductible health insurance who can face thousands of dollars in out-of-pocket costs. Washington Post, "Trump promising consumers digital-age health care approach," 12 Mar. 2018

Recent Examples on the Web: Noun

The Jayapal and Sanders bills would both expand traditional Medicare to cover all Americans, and change the structure of the program to cover more services and eliminate most deductibles and copayments. Abby Goodnough, BostonGlobe.com, "Activists on the doorstep have a plea: Will you support Medicare for All?," 15 June 2019 All insurers offer hurricane deductibles on the windstorm portions of their policies of $500, or a percentage of the policy’s structure limit. Ron Hurtibise, Sun-Sentinel.com, "Do you have enough homeowner insurance? Here's how to find out," 13 July 2018 Also, the interest is no longer tax deductible; the new tax law eliminated this longstanding feature. New York Times, "How to Get Help Paying for Your Wedding," 9 May 2018 All donations made through the Big Give are tax deductible. Melissa Fletcher Stoeltje, San Antonio Express-News, "It’s Big Give time again," 18 Mar. 2018 Most employers now require their workers to pay a deductible before their insurance kicks in, with individuals on the hook for $1,500, on average, in upfront payouts, according to the Kaiser Family Foundation. Reed Abelson, The Seattle Times, "Who’s reinventing health benefits? One of the most hated companies in the U.S.," 4 Sep. 2018 Wile, who has a $2,750 deductible, used a coupon to obtain the drug. Washington Post, "Out-Of-Pocket Costs Put HIV Prevention Drug Out Of Reach For Many At Risk," 11 July 2018 One caveat: People who have a high-deductible plan should have enough savings to cover that deductible. Liz Weston, The Seattle Times, "Liz Weston: How to save money on health care," 22 Oct. 2018 Even paying $1,000 of that deductible is a lot for me. Sara Gaynes Levy, Marie Claire, "What Happens When You Can’t Afford Breast Cancer Reconstruction?," 16 Oct. 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.

See More

First Known Use of deductible

Adjective

1856, in the meaning defined above

Noun

1929, in the meaning defined above

Keep scrolling for more

Learn More about deductible

Statistics for deductible

Last Updated

18 Jun 2019

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)

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

Keep scrolling for more

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

Comments on deductible

What made you want to look up deductible? Please tell us where you read or heard it (including the quote, if possible).

WORD OF THE DAY

showing courage and determination

Get Word of the Day daily email!

Test Your Vocabulary

Words for Summer: A Quiz

  • a closeup of a sunflower
  • Which of the following words means “of or relating to summer”?
True or False

Test your knowledge - and maybe learn something along the way.

TAKE THE QUIZ
Add Diction

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ
Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!