Deductible
/dɪˈdʌktəbəl/
Definitions
2 meaningsThe amount of money that you have to pay before your insurance company will pay anything.
/dɪˈdʌktəbəl/
The amount subtracted from a gross income or bill.
My health insurance has a high deductible, so I pay a lot out-of-pocket.
💡 Simply: Imagine you have a scratch on your car and your insurance covers repairs. The deductible is the amount you pay *first* towards fixing the scratch. If the repair costs $1000 and your deductible is $500, you pay the $500 and your insurance covers the remaining $500.
👶 For kids: It's like when you have a scraped knee, you pay a little bit before the doctor's office helps pay.
More Examples
The insurance deductible for the hurricane damage was very high.
Make sure you understand your deductible before you file a claim.
How It's Used
"You have to pay the deductible before your insurance starts covering the costs."
"The company's annual deductible for medical expenses is $5,000."
That can be subtracted from a total amount, especially for tax purposes.
/dɪˈdʌktəbəl/
Capable of being deducted from income or taxes.
The interest on my student loans is deductible.
💡 Simply: Think about tax time! Some of your expenses, like donating to charity, are 'deductible'. This means you can subtract that amount from your income, which lowers the amount of taxes you have to pay.
👶 For kids: Something that can be taken away when you are paying for taxes.
More Examples
Make sure to keep receipts for any deductible expenses.
Check with a tax professional to find out which expenses are deductible in your state.
How It's Used
"Charitable contributions are often deductible expenses."
"This business expense is deductible, reducing the company's tax liability."
Synonyms & Antonyms
Synonyms
From Latin *deductibilis* (capable of being deducted), derived from *deducere* (to lead down, withdraw). The word's usage evolved in legal and financial contexts, specifically relating to reducing a sum or cost.
The concept of a 'deductible' emerged in financial contexts during the 19th and early 20th centuries, evolving alongside insurance practices and tax regulations.
Memory tip
Think of it as the 'down payment' you make before insurance kicks in.
Word Origin
"To lead down, to withdraw; capable of being subtracted."