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Tax

Twenty Comon Tax filing terms in plain English.

@shortsegments@shortsegments (78)5d

Dear Readers, As I was looking at this new community it occurred to me that a good place to start would be Tax Terminology. I always get confused by terminology whether I am learning French or Robotics. So I though I would ask Google what are 20 comon Tax Terms I should know and immediately Google gave me three extra ones! This is all research and I have cited the sources at the end, but also fotnoted each definition so you know where it came from. I have also added some videos in the references for those who prefer to listen over read.

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20 Common Tax Terms Defined.

Understanding tax terms helps you manage your money and file forms like the Form 1040 without stress.

Core Income and Earnings

  • Gross Income: All the money you earn from a job, tips, side gigs, or interest before any money is taken out.
  • Adjusted Gross Income (AGI): Your gross income minus a few specific initial expenses like student loan interest or retirement contributions.
  • Taxable Income: The final amount of your income that the government actually calculates your taxes on after all deductions.
  • Filing Status: Your life category (such as single or married) that sets your tax rules and standard deduction size.
  • Dependents: People—usually children or aging relatives—who rely on you for most of their financial support. [3, 4, 5, 6, 7, 8]

Deductions and Credits

  • Tax Deduction: An expense you subtract from your income to shrink the total amount that gets taxed.
  • Standard Deduction: A fixed, no-fuss dollar amount the government lets you subtract from your income.
  • Itemized Deductions: A list of individual personal expenses (like mortgage interest or charity gifts) added up to replace the standard deduction.
  • Tax Credit: A powerful discount that slashes your actual tax bill dollar for dollar.
  • Refundable Credit: A special tax credit that can give you money back even if it drops your tax bill below zero. [6, 8, 9, 10, 11, 12, 13]

Rates and Payments

  • Tax Bracket: The specific tax percentage rate applied to each slice of your progressive income.
  • Marginal Tax Rate: The exact tax rate you pay on your very next, last dollar of income.
  • Withholding: The money your boss automatically holds back from each paycheck to pay your taxes early.
  • Estimated Tax Payments: Regular quarterly payments sent directly to the IRS if your job does not automatically withhold taxes for you.
  • Capital Gains: The cash profit you pocket when you sell an investment or property for more than you paid. [3, 8, 10, 14, 15, 16, 17, 18]

Forms and Obligations

  • Tax Liability: The total grand total of money you owe the government for the year.
  • Tax Return: The official paperwork or online file submitted to report yearly earnings and final tax math.
  • Audit: An official review by the IRS where they ask you to prove the numbers on your tax return are correct.
  • Extension: Extra time granted by the government to submit your tax paperwork, though it does not delay payment deadlines.
  • Self-Employment Income: Money earned from working for yourself rather than a traditional employer.
  • Explore a detailed guide from Forbes Advisor.
  • Read the tax concepts overview on the Tax Foundation.
  • Check the official definitions at the IRS Glossary. [3, 10, 19, 20, 21, 22]

Bonus Words: Tax Filing Status

Single (Individual): Your filing status if you are unmarried, legally separated, or divorced and do not qualify for another category.

Married Filing Jointly: A status for married couples who combine their income and deductions onto one single tax return to often get better tax rates.

Head of Household: A special status for unmarried people who pay for more than half of the household keeping costs and support a qualifying dependent child or relative.

References

[1] https://turbotax.intuit.com [2] https://blog.stridehealth.com [3] https://www.forbes.com [4] https://www.youtube.com [5] https://www.youtube.com [6] https://www.youtube.com

[7] https://blog.umb.com [8] https://www.portebrown.com [9] https://www.walzgroupcpa.com [10] https://www.youtube.com [11] https://www.khanacademy.org [12] https://publicintegrity.org [13] https://blog.stridehealth.com [14] https://www.protective.com [15] https://www.mytaxrights.org [16] https://www.fultonbank.com [17] https://www.dimercurioadvisors.com [18] https://www.burr.com [19] https://www.mytaxrights.org [20] https://www.fultonbank.com [21] https://taxfoundation.org [22] https://apps.irs.gov

[4] https://www.youtube.com [5] https://www.youtube.com [6] https://www.youtube.com

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Comments · 8

  • @lee1938(68)· 1d

    Upvoted and Reblogged

  • @lee1938(68)· 1d
    #hive #posh
  • @waleedraza(59)· 4d

    When posts start coming in this community, we will see a lot about what kind of tax system is operating in countries around the world,

  • @waleedraza(59)· 4d

    Reblog and upvote,

  • @waleedraza(59)· 4d
  • @djbravo(75)· 5d

    This community will benefit us by knowing how much tax people around the world are paying and how much money they are spending. We can still find out these things, but until the people living there tell us the truth, nothing will be known for sure.

  • @djbravo(75)· 5d

    Sharing upvoted and Reblogged.

  • @djbravo(75)· 5d

    Sharing on Twitter.