What is Tax Deductible?

An expenditure is considered to be tax deductible when it can be subtracted from the adjusted gross income line item on a tax return , thereby reducing the amount of income that is subject to taxation. Tax laws specify which expenditures can be treated in this manner; they are considered to be any expense that is ordinary, necessary, and reasonable. Examples of tax deductible expenditures are charitable contributions and mortgage interest . Tax deductible expenditures will vary by region, depending on the tax policies of the applicable government.