tax shield

Definition

A strategy of reducing of income tax liabilities by taking allowable deductions from taxable income, such as payments for mortgage interest, medical expenses and charitable contributions.

Use tax shield in a sentence

We exploited our tax shield and came out of the year with more money in our pocket than we had originally thought.

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There was a tax shield up and that was just to prevent certain outcomes from happening, which was important to us.

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Given the annual increases made to the standard deduction many taxpayers are finding the tax shield previously afforded them through itemized deductions have lessened in importance.

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Mentioned in these terms

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depreciation tax shield Accelerated Depreciation