• An item or expenditure subtracted from Adjusted Gross Income to reduce the amount of income subject to tax.

 Embedded terms in definition
 Adjusted gross income
 Referenced Terms
 Amortization: The systematic expensing of a portion of the cost of a fixed asset against sales revenue.(1) The paying off of debt in regular installments over a period of time. (2) The Deduction of certain capital expenses over a specific period of time.The repayment of a loan by installments.Is the periodic pay down of principal. This is a common feature of most mortgages. Amortize also refers to the accounting write down or reduction in an intangible asset. This creates a charge against income. Amortization can also refer to the reduction in the cost basis of a bond purchased at a premium to par. Sometimes, amortization is used as a synonym for depreciation or other write down of an asset or liability. In the later capacity it tends to apply to intangible assets. See Interest Impact on Installment to Amortize or Amortization.The process of reducing a debt through installment payments of principal and interest.

 Canadian controlled private corporation: Abbreviated CCPC. A small corporation whose first $200,000 of taxable income qualifies for the small business Deduction offered by the federal government.

 Cash discount: A percentage Deduction from the purchase price; available to the credit customer who pays its account within a specified period of time.An incentive offered to purchasers of a firm's product for payment within a specified time period, such as ten days.

 Earnings before interest and taxes: Abbreviated EBIT. A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and non-operating profit before the Deduction of interest and income taxes.

 Interest subsidy: A firm's Deduction of the interest payments on its debt from its earnings before it calculates its tax bill under current tax law.

 Related Terms
 Manufacturing and processing deduction
Small business deduction

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Managing Your Expenses on a Fixed or Reduced Income: Once you've retired, you finally have the opportunity to work at your dream job - keeping yourself happy. It's your chance to visit places you've always wanted to see, take up a new hobby and spend more time with your family and friends. But to be successful at this new position, you've got to make the most of your income and investments. Here are suggestions. More...

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