Tax Vocabulary

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Taxable income

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The adjusted gross income minus standardized or itemized deductions.

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Federal income tax

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Taxes levied (collected) on personal income.

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Form W-2

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The form that employers must provide to employees by January 31 of each year that gives annual income and withholding information.

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Taxes

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Mandatory fees placed on income, property, or goods to support government programs.

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Dependent

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Someone who is cared for throughout the year, including paying their expenses.

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Adjusted Gross Income (AGI)

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Total income minus specific deductions, used to determine taxable income.

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Standard deduction

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A fixed dollar amount that reduces the income you're taxed on.

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Itemized deductions

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Eligible expenses that individual taxpayers can claim to decrease their taxable income.

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Tax credits

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Amounts that taxpayers can subtract directly from the taxes they owe.

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Filing status

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A category that defines the type of tax return form a taxpayer will use, such as single, married filing jointly, etc.