Liability insurance provides protection from claims arising from injuries or damage to other people or property. It is essential for motor vehicle, home, and business owners. Business liability insurance premiums are deductible.
Prepaid expenses refer to amounts that are paid prior to the period they cover, such as insurance and rent. These expenses are assets on the balance sheet and become tax deductible during the appropriate period.
Shareholder debt refers to the financial obligations incurred by a company to its shareholders, where interest paid on this debt is tax-deductible. It is commonly used in highly leveraged funding arrangements typically associated with private equity firms.
A tax-deductible expense can be used to reduce taxable income, resulting in a lower tax liability. Common examples include interest on housing, ad valorem taxes, depreciation, repairs, maintenance, utilities, and other ordinary and necessary business expenses.
Denoting an amount that can be deducted from income or profits, in accordance with the tax legislation, before establishing the amount of income or profits that is subject to tax.
Title insurance is an insurance policy that protects the holder from loss sustained through defects in the title. Mortgage lenders virtually always require borrowers to buy a mortgagee's policy of title insurance. The premiums paid on a business title insurance policy are normally tax deductible.
