What term refers to a fixed amount allowed by taxation authorities that can be deducted from income?

The term that refers to a fixed amount allowed by taxation authorities that can be deducted from income is a deduction. Deductions are subtracted from an individual's gross income, reducing the amount of income that is subject to taxation. This can ultimately lower the taxpayer's overall tax liability. Tax deductions can be based on various factors, such as expenses incurred in the course of earning income, or specific amounts that tax laws allow taxpayers to subtract to encourage certain behaviors or reduce tax burdens.

In contrast, an exemption generally refers to a specific condition under which certain income may not be taxed at all or where taxpayers can exclude certain amounts from their income. A credit is a direct reduction in tax liability based on what you have paid or incurred, which can reduce taxes owed dollar-for-dollar, and a write-off often refers to a business expense that is not taxable income but is treated similarly to a deduction. Each of these terms serves different purposes in tax law, but a deduction specifically addresses the fixed amount that is subtracted from income to arrive at the taxable amount.