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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Deductions


Synonyms:deduce, subtractions, tax write-off
Filed Under: financial-banking, taxation
Tags: banking, taxes
 

Definition of deductions

deductions
1. These are expenses the government allows you to subtract from your taxable income. If you have taxable income of $31,000 and deductions of $4,000, then you would figure how much tax you owe on the difference -- $27,000.

Related Terms and Acronyms:

  • marital deduction   For estate tax and gift tax purposes, a deduction that allows you to transfer assets to your spouse tax-free.
  • Notice of Assessment (NOA)   A form the federal government issues when personal taxes are complete. A notice of assessment shows a breakdown of the given years income along with the balance owing or refund.
      ➥  Canada Revenue Agency's T451 tax form.
  • provision for credit losses (PCL)   The amount deducted from income equal to the amount by which a bank adjusts its loan balances to reflect anticipated losses on them.
  • refund   To give back, return, or repay.

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