Tax Deductibility

Tax deductibility refers to certain expenses or payments you make that the government allows you to subtract from your total income when calculating your taxable income. This reduction lowers the amount of income that is taxed, which can decrease the amount of tax you owe. Common deductible expenses include mortgage interest, charitable donations, or business costs. Essentially, being tax deductible means that specific costs can be claimed to reduce your tax liability, often encouraging certain behaviors like charitable giving or investing in your business.