Tax deduction
A reduction in taxable income — worth your marginal rate times the deduction amount.
Why it matters
A $1,000 deduction saves $220 for someone in the 22% bracket. Deductions are less powerful than credits, which reduce tax directly. Above-the-line deductions apply before AGI; below-the-line (itemized or standard) apply after.
See also
Educational only — not financial, tax, or legal advice.