deductible

adjective de·duct·ible \ di-ˈdək-tə-bəl , dē- \

|Updated on: 5 Jun 2018

Examples: deductible in a Sentence

Definition of deductible

: allowable as a deduction

expenses that are deductible from taxable income

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deductibility

play \-ˌdək-tə-ˈbi-lə-tē\ noun

See deductible defined for English-language learners

Examples of deductible in a Sentence

The trip was deductible as a business expense.

Recent Examples of deductible from the Web

New Jersey Governor Phil Murphy signed legislation to let homeowners declare property taxes as charitable donations deductible on their annual Internal Revenue Service filings.

— elise young, Bloomberg.com, "New Jersey Homeowners Get a Way to Skirt Trump’s Lower Tax Deductions," 4 May 2018
Firms often listed advisory fees that were deductible on this form, although the IRS doesn’t require it.

— laura saunders, WSJ, "What to Do Now That the Deduction for Investment Fees Is Dead," 4 May 2018
Another would convert state income taxes to an employer-side payroll tax, which would still be deductible on federal tax returns.

— jim tankersley, New York Times, "Washington’s Fight Over Taxes Is Only Beginning," 23 Feb. 2018
In some states even registration fees are deductible on federal taxes, as long as they are based on the value of the vehicle.

— paul a. eisenstein, NBC News, "Trump’s new tax plan might just make your new car more costly," 21 Jan. 2018
HEALTH Travis Allen, Republican Opposes a state single-payer health coverage system. Wants to expand health care savings plans, which are tax-deductible accounts for people with high up-front costs in their coverage.

— San Francisco Chronicle, "Where candidates for governor stand on California’s biggest issues," 17 May 2018
The Artwalk commission is 20% and is a tax deductible donation to Ballet Apetrei, a non-profit organization.

— sarah bonnette, NOLA.com, "Artscape: Wealth of young artistic talent on display on the north shore," 16 May 2018
Tax deductible donations may be made payable to the Newington Memorial Day Parade can be mailed to The Newington Memorial Day Parade, Inc. at 131 Cedar Street, Newington, CT 06111.

— Courant Community, "Community News For The Wethersfield Edition," 15 May 2018
Donations to the library system, which are tax-deductible, can be made here.

— howard koplowitz, AL.com, "Jefferson County Library celebrating 40 years with birthday party, fundraiser," 1 May 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.

First Known Use of deductible

1856

in the meaning defined above

See Words from the same year

NEW! Time Traveler

Other Economics Terms

actuary, compound interest, globalization, indemnity, portfolio, rentier, stagflation, usurer

deductible

noun

Definition of deductible

: 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

See deductible defined for English-language learners

Examples of deductible in a Sentence

I have an insurance policy with a ,000 deductible.

Recent Examples of deductible from the Web

Insurers are tightening their prescription drug coverage and raising patient costs like deductibles as treatment prices soar.

— tom murphy, chicagotribune.com, "Cancer patients are twice as likely to declare bankruptcy," 22 May 2018
Insurers are tightening their prescription drug coverage and raising patient costs like deductibles as treatment prices soar.

— Washington Post, "Many cancer patients juggle care along with financial pain," 22 May 2018
Plus, more than 1 in 5 Californians with coverage is considered underinsured — burdened with high deductibles or forced to spend an inordinate amount on a policy.

— joe garofoli, San Francisco Chronicle, "Where California’s candidates for governor stand on fixing health care," 13 May 2018
Individuals wouldn't have to worry about deductibles, copays or narrow provider networks.

— the washington post, OregonLive.com, "Engineer fired over memo sues Google, alleging bias against white men," 8 Jan. 2018
Co-pays and deductibles are the responsibility of the patient and will be billed.

— Courant Community, "Community News For The Colchester Edition," 15 May 2018
These deductibles are in effect in 19 states and the District of Columbia, according to the Insurance Information Institute.

— darla mercado, USA TODAY, "How to prepare your home — and your finances — for a hurricane," 12 May 2018
Some insurance companies may cover if owners pay the deductible, while others won't, and folks often are left paying out-of-pocket.

— christina hall, Detroit Free Press, "Rats can't resist wiring in newer cars: Here's why," 7 May 2018
This week, that crater essentially couldn’t hold any more, and the lava started to overflow into the residential areas below. [LA Times / Rong-Gong Lin II] Health insurance policies increasingly have sky-high deductibles.

— ella nilsen, Vox, "Vox Sentences: A big eruption on Hawaii’s Big Island," 5 May 2018

First Known Use of deductible

1929

in the meaning defined above

See Words from the same year

NEW! Time Traveler

Other Economics Terms

actuary, compound interest, globalization, indemnity, portfolio, rentier, stagflation, usurer

Financial Definition of DEDUCTIBLE

deductible

adjective

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 Defined for English Language Learners

deductible

adjective

Definition of deductible for English Language Learners

: able to be subtracted from an amount of money

deductible

noun

Definition of deductible for English Language Learners

: 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

Law Dictionary

deductible

adjective de·duc·ti·ble \ di-ˈdək-tə-bəl \

legal Definition of deductible

: allowable as a deduction

—

deductibility

play \-ˌdək-tə-ˈbi-lə-tē\ noun

deductible

noun

legal Definition of deductible

: 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 4a