Tax loophole definition

A provision in the laws governing taxation that allows people to reduce their taxes. A deliberate or accidental provision in tax law that allows an individual or corporation to be exempt from some provision. Most loopholes are deliberate and are created to ensure that the law is not draconian, to please a lobbyist, or for some other reason. A tax loophole is an exploitation of a tax law which can reduce or eliminate the tax liabilities of the filer.

Used often in discussions of taxes and their avoidance, loopholes provide ways for individuals and companies to remove income or assets from taxable situations into ones with lower taxes or none at all. They are wrong, everyone seems to say, and crusades are mounted against them time and again.

Tax loopholes are one of the great mysteries of modern politics. Yet the evil never gets stamped out, for loopholes keep creeping back into the tax code. Lots of benign deductions and credits do just that.

Loopholes are often thought of as the domain of corporations and the business worl but there are quite a few available to individual taxpayers as well. How to use loophole in a sentence. An example of a tax loophole is the tax break for small businesses who invest in heavy vehicles.

A loophole is an exception that allows a system to be circumvented or avoided. It usually refers to legal, taxation, or security strategies that are exploited for personal gain.

Quite often, the original wording of a tax break is used to justify the use of a loophole. A tax credit is a dollar-for-dollar reduction in your tax bill. Though many taxpayers regard it as the same thing as a tax deduction, it is very much not the equal.

Tax credits are far more valuable. They directly reduce the amount you pay in taxes and are not dependent on the tax bracket you fall into. American population, and of wealth was held by the top. English dictionary definition of loophole.

A way of avoiding or escaping a cost or legal burden that would otherwise apply by means of an omission or ambiguity in the wording of a contract or. Originally, the word means an arrowslit, a narrow vertical window in a wall through which an archer could shoot. This is a tax credit for the production of alcohol-based fuel, most commonly ethanol, which is made from corn. In theory, the credit is meant to encourage alternative forms of energy to imported oil.

It is largely responsible for propping up the price of corn,. The credit ranges from $0. Lettris is a curious tetris-clone game where all the bricks have the same square shape but different content.

Each square carries a letter. It just seems that the person benefiting from the loophole often is following the letter of the tax law, but not the spirit of the law. Similarly, there are many tax deductions that appear to provide disproportionate tax benefits to a select few. Because carried interest is considered a return on investment, it is taxed at a.

Read more: Cheat on taxes? Loophole definition , a small or narrow opening, as in a wall, for looking through, for admitting light and air, or, particularly in a fortification, for the discharge of missiles against an enemy outside.