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Internal Revenue Code of 1986

The main body of federal tax laws in the United States, which the IRS uses to collect taxes.

Depreciation

An accounting method that allows businesses to deduct the cost of a tangible asset, like machinery or a building, over its useful life, recognizing its wear and tear over time.

Amortization

Similar to depreciation, but applies to intangible assets, like patents or copyrights, allowing businesses to spread out and deduct their cost over a period of time.

Depletion

An accounting method used to deduct the cost of extracting natural resources, like oil, gas, or minerals, from the earth as they are used up.

Business Interest Deduction

A tax write-off that allows businesses to reduce their taxable income by the amount of interest they pay on loans used for business purposes.

Income Limitation on Business Interest

A rule that restricts how much business interest a company can deduct each year, usually capped at a percentage of its taxable income before certain deductions.