deduction

Examples of deduction in the following topics:

• Tax Deductions

  • A tax deduction is a reduction of the amount of income subject to tax.
  • What is the after-tax cost of a $1,000 of deductible expense?
  • A tax deduction is a sum that can be removed from tax calculations.
  • Often these deductions are subject to limitations or conditions.
  • While a deduction is a reduction of the level of taxable income, a tax credit is a sum deducted from the total amount of tax owed.

• Different Lines of Reasoning

  • Deductive reasoning, also called deductive logic, is the process of reasoning from one or more general statements, laws, or principles regarding what is known, in order to reach a logically certain conclusion.
  • Deductive reasoning involves using given, true premises to reach a conclusion that is also true.
  • Deductive reasoning contrasts with inductive reasoning in that a specific conclusion is arrived at from the general principle when reasoning deductively.
  • If the rules and logic of deduction are followed, this procedure ensures an accurate conclusion.
  • Here is a classic example of a deductive argument:

• Elective Expensing

  • . § 179) allows a taxpayer to elect to deduct the cost of certain types of property on their income taxes as an expense, rather than requiring the cost of the property to be capitalized and depreciated.
  • Buildings were not eligible for section 179 deductions prior to the passage of the Small Business Jobs Act of 2010; however, qualified real property may now be deducted.
  • Depreciable property that is not eligible for a section 179 deduction is still deductible over a number of years through MACRS depreciation according to sections 167 and 168.
  • If, for example, the taxpayer's net trade or business income from active conduct of trade or business was 72,500 dollars in 2006, then the deduction cannot exceed 72,500 dollars that year.
  • However, any deduction not allowed in a given year under this limitation can be carried over to the next year.

• Logic

  • Instinct, intuition, abduction, deduction, induction and authority are examples of sources of knowledge.
  • However, most discussions of methods in science place primary emphasis on inductive and deductive processes.
  • Aristotle (384-322BCE) is usually credited with formalizing syllogistic or deductive reasoning.
  • Abduction is the insight that occurs with less conscious formal reasoning than either induction or deduction.
  • It is the purpose of inductive and deductive reasoning to test the hypotheses that emerge from the process of abduction.

• Disposable Income

  • For the purposes of calculating the amount of income subject to garnishment, United States federal law defines disposable income as an individual's compensation (including salary, overtime, bonuses, commission, and paid leave) after the deduction of health insurance premiums and any amounts required to be deducted by law.
  • Amounts required to be deducted by law include federal, state, and local taxes, state unemployment and disability taxes, social security taxes, and other garnishments or levies, but does not include such deductions as voluntary retirement contributions and transportation deductions.

• Reasoning

  • We use many mental shortcuts when conducting inductive, deductive, abductive, and analogous reasoning to find a solution to a problem.
  • In order to solve problems, we utilize four major forms of reasoning: deduction, induction, abduction, and analogy.
  • Deduction is the process of reasoning from one or more general statements, known as premises, to reach a logically certain conclusion.
  • Unlike deductive reasoning , it allows for the possibility that the conclusion is false, even if all the premises are true.
  • Unlike deductive reasoning, the premise does not guarantee the conclusion, and is considered an inference to the best explanation.

• S-Corporations (S-Corps)

  • S corporations elect to pass corporate income, losses, deductions, and credit through to their shareholders for federal tax purposes.
  • S corporations elect to pass corporate income, losses, deductions, and credit through to their shareholders for federal tax purposes.
  • However, in the manner of a partnership, an S corporation's income, deductions, and tax credits flow through annually to shareholders, regardless of whether distributions are made.
  • Unlike a C corporation, an S corporation is not eligible for a dividends received deduction, nor is it subject to the ten percent of taxable income limitation applicable to charitable contribution deductions.

• Scientific Reasoning

  • Science is knowledge obtained from logical inferences and deductive experimentation that attempts to comprehend nature.
  • To do this, they use two methods of logical thinking: inductive reasoning and deductive reasoning.
  • Deductive reasoning or deduction is the type of logic used in hypothesis-based science.
  • In deductive reason, the pattern of thinking moves in the opposite direction as compared to inductive reasoning.
  • Scientists use two types of reasoning, inductive and deductive, to advance scientific knowledge.

• Reasoning and Inference

  • Essentially, deduction starts with a hypothesis and examines the possibilities within that hypothesis to reach a conclusion.
  • However, deductive reasoning has limited applicability in the real world because there are very few premises which are guaranteed to be true all of the time.
  • A syllogism is a form of deductive reasoning in which two statements reach a logical conclusion.
  • In this video, we see the famous literary character Sherlock Holmes use both inductive and deductive reasoning to form inferences about his friends.
  • Can you distinguish between his deductive (general to specific) and inductive (specific to general) reasoning?

• Federal Income Tax Rates

  • Federal income tax is levied on the income of individuals or businesses, which is the total income minus allowable deductions.
  • Taxable income is total income less allowable deductions.
  • Most business expenses are deductible.
  • Individuals may also deduct a personal allowance and certain personal expenses.
  • Some of these deductions are subject to limits.