tax break

noun

Definition of tax break 

: a lower tax rate than other people have People with small children are being given a tax break.

Learn More about tax break

Dictionary Entries near tax break

tax base

tax bond

tax book

tax break

tax burden

tax cart

Taxco

Statistics for tax break

Look-up Popularity

Keep scrolling for more

More Definitions for tax break

tax break

Financial Definition of tax break

What It Is

A tax break is a tax deduction, tax credit or reduction in tax rate.

How It Works

For example, let's say John and his wife had a baby in 2011. When John files his tax return for the year 2011, he will qualify for a $1,000 child tax credit, which lowers his tax bill by $1,000. In other words, John and his wife get a tax break for having a baby.

There are hundreds of different kinds of tax breaks available to individuals and companies, though these tax breaks are usually only available under certain circumstances. Many tax breaks are not available to taxpayers with high incomes.

Why It Matters

Tax breaks lower tax bills, which is why taxpayers and tax advisors spend considerable amounts of time determining which deductions and credits they qualify for each year. Governments often implement tax breaks as a way to encourage certain behavior or investment in certain industries or programs.

Source: Investing Answers

Comments on tax break

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

WORD OF THE DAY

by force of circumstances

Get Word of the Day daily email!

Test Your Vocabulary

Difficult Vocab Quiz

  • the-education-of-achilles-eugne-delacroix
  • Which is a synonym of discomfit?
True or False

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

TAKE THE QUIZ
Word Winder's CrossWinder

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!