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Tax Deduction

A tax deduction is an expense incurred by a taxpayer that is subtracted from gross income or adjusted gross income.  If it is subtracted directly from gross income it is an above-the-line tax deduction.  If it is subtracted from adjusted gross income it is a below-the-line tax deduction.  The value of a tax deduction (i.e. reduced tax liability) is dependant on the taxpayer's tax bracket.  The tax bracket along with gross income are used to determine a taxpayer's effective tax rate.  A tax deduction is similar to a tax credit, except a tax credit is paid dollar for dollar.

Truck drivers are eligible for many trucking-related tax deductions that get recorded on IRS Form 2106.


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