Learn the Important Tax Terms

Confused by the tax lingo? Get easy-to-understand definitions for commonly used tax terms and phrases right here!

Adjusted gross income (AGI): Your income after subtracting adjustments. Check last year’s 1040 to estimate this year’s amount.

Adjustment (above-the-line deduction): Anyone who qualifies can claim one, without itemizing.

Itemized deductions: Expense amounts that you subtract from your income.

Standard deduction: A fixed amount that you’re allowed to deduct in lieu of itemized deductions.

Tax credit: A direct reduction in the amount of tax you owe.