Definition

1. Adjective:

   • Capable of being subtracted or taken away: Describes something, especially an expense or cost, that can be legally subtracted from a total amount, such as taxable income or a claim amount.

2. Noun:

   • Insurance Clause: A specific clause in an insurance policy stating the amount of money the policyholder must pay out-of-pocket before the insurance company's coverage begins for a claim.
   • Tax Amount: An amount, especially an expense, that can be subtracted from gross income when calculating taxable income for tax purposes.

Examples

• Adjective:

  • Business travel expenses are often deductible.
  • Charitable donations are deductible from your taxable income.

• Noun (Insurance):

  • My health insurance has a $500 deductible per year.
  • After paying the deductible, the insurance covered the rest of the repair costs.

• Noun (Tax):

  • Mortgage interest is a common tax deductible.
  • You should keep receipts for all potential deductibles.

Advanced Usage

• "Meet your deductible": To pay enough in covered expenses to reach the amount specified in your insurance policy's deductible clause, after which the insurer pays a larger share.

  • Once you meet your deductible, the insurance will cover 80% of further costs.

• "Above-the-line deductible": A tax deduction available even to taxpayers who do not itemize their deductions.

  • Contributions to a traditional IRA are an above-the-line deductible.

Variants and Related Words

• Deduct (verb): To subtract or take away an amount from a total.

  • The bank will deduct the fee from your account.

• Deduction (noun): The act of deducting; an amount that is or may be deducted.

  • The deduction for dependents reduces your tax bill.

Synonyms

• Subtractable (adj.): Capable of being taken away.
• Out-of-pocket cost (n., insurance context): The initial amount paid by the insured.
• Exemption / Allowance (n., tax context): An amount that may be excluded or deducted.

Related Phrases

• High-deductible health plan (HDHP): A type of health insurance plan with lower premiums and a higher deductible than traditional plans.

  • He chose an HDHP and pairs it with a health savings account.

• Itemized deductions: A list of eligible expenses that are individually subtracted from gross income to reduce taxable income, as opposed to taking a standard deduction.

  • For the year, her itemized deductions totaled more than the standard deduction.

Related Idioms

• "It's all deductible": A colloquial phrase suggesting that a business expense can be written off for tax purposes, often used humorously or to justify a cost.
  • Don't worry about the expensive dinner with the client; it's all deductible.

Adjective

1. acceptable as a deduction (especially as a tax deduction)

Noun

1. a clause in an insurance policy that relieves the insurer of responsibility to pay the initial loss up to a stated amount
2. (taxes) an amount that can be deducted (especially for the purposes of calculating income tax)