Is it permissible to describe a deceased Muslim as "the late" (al-marḥūm), or should one say "the late, by the grace of Allah" (al-marḥūm bi-idhn Allāh)?

The word "marhoom" (deceased, literally "one who has been shown mercy") is a common word. If it is intended to convey that the deceased has actually been shown mercy, then it is not permissible. However, if it is intended as a supplication (dua), then there is no harm in it. It is preferable to use "rahimahullah" (may Allah have mercy on him) or "ghafarallah lahu" (may Allah forgive him).