Definition, Meaning & Synonyms

allowable deduction

noun

/əˈlaʊ.ə.bəl dɪˈdʌk.ʃən/

Definition

An allowable deduction is an expense that you can subtract from your total income when calculating your taxable income.

Examples

The business incurred several allowable deductions, including office supplies and travel expenses.
Taxpayers are encouraged to keep track of all receipts related to allowable deductions to maximize their tax returns.

Meaning

This term refers to expenses that the tax code permits taxpayers to deduct from their gross income, which helps to reduce the amount of income that is subject to tax.