Legal Definitions - ZA

Deduction is the act of taking away or subtracting something. In taxes, it refers to an amount that can be subtracted from gross income to calculate adjusted gross income or from adjusted gross income to calculate taxable income.

• A taxpayer can deduct their charitable contributions from their taxable income. For example, if someone donates $100 to a qualified charity, they can deduct $100 from their taxable income.
• When a person turns 65 or becomes blind, they are entitled to an additional standard deduction. For example, if someone turns 65 during the tax year, they can deduct an additional amount from their taxable income.
• If a person inherits a portion of a succession, they are entitled to a deduction before a partition. For example, if someone inherits a house with three siblings, they are entitled to a deduction of one-fourth of the value of the house before the partition.