Taxes
Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization.
Federal Income Tax
A tax levied by the United States Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, and other legal entities.
FICA (Federal Insurance Contributions Act)
A federal law that requires employees to contribute a portion of their earnings to fund Social Security and Medicare.
Social Security Tax
A tax that funds the Social Security program, which provides benefits for retirees, the disabled, and children of deceased workers.
Medicare Tax
A payroll tax that funds Medicare, providing health insurance for Americans aged 65 and older, as well as for some younger people with disability status as determined by the Social Security Administration.
Sales Tax
A tax paid to a governing body for the sales of certain goods and services.
Property Tax
A tax assessed on real estate by the local government and paid by the property owner.
Tax Deduction
A reduction of income that is able to be taxed and is commonly a result of expenses, particularly those incurred to produce additional income.
Charitable Contributions
Donations made to charitable organizations that may be tax-deductible for the donor, reducing their taxable income.
Tax Brackets
The divisions at which tax rates change in a progressive tax system. Essentially, they are the cutoff values for taxable income—income past a certain point will be taxed at a higher rate.
Taxable Income
The amount of income used to calculate how much tax an individual or a company owes to the government in a given tax year.
Tax Collection
The process by which a government collects taxes from its citizens and businesses.
Tax Extension
An allowance granted by the IRS to file an income tax return after the regular deadline.
Self-Employment Tax
The tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves.
An IRS form that an employee completes to indicate his or her tax situation to the employer. The W-4 form tells the employer the correct amount of tax to withhold from an employee's paycheck.
Paycheck
A check for salary or wages made out to an employee.
Capital Gains
Long term profits from the sale of property or an investment.
Tax Credits
Amounts that can be subtracted directly from taxes owed to the government.
Continuing Education Tax Credits
Tax credits that may be available for tuition and related expenses paid for enrollment or attendance at an educational institution.
Internal Revenue Service (IRS)
The U.S. government agency responsible for the collection of taxes and enforcement of tax laws.
Withholding
The portion of an employee's wages that is not included in their paycheck because it is sent directly to the federal, state, and local tax authorities.
Tax Return
A form(s) filed with a taxing authority that reports income, expenses, and other pertinent tax information.
Tax Refund
The return of excess amounts of income tax that a taxpayer has paid to the state or federal government throughout the past year.
Audit
An official inspection of an individual's or organization's accounts, typically by an independent body.
Adjusted Gross Income
An individual's total gross income minus specific deductions.
The standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns.
Schedule C
A form used by sole proprietors to report profits and losses from a business.
Standard Deduction
A portion of income not subject to tax that can be used to reduce your tax bill.
Itemized Deductions
Eligible expenses that individual taxpayers can claim on federal income tax returns and which decrease their taxable income.
Taxable Event
Any financial action or transaction that may result in taxes being owed to a government authority.
