Reference
Tax words, in plain language
Short, plain definitions of the terms you see on your return and throughout this site, listed A to Z.
Adjusted gross income (AGI)
Your total income minus certain adjustments, like deductible IRA or HSA contributions and student loan interest. Many credits and deductions depend on it.
Related guide →Adjustments to income
Specific amounts subtracted from total income before you get to AGI. They come from Schedule 1, and you can take them whether or not you itemize.
Related guide →Credit
An amount subtracted directly from your tax, dollar for dollar. A $1,000 credit lowers your tax by $1,000.
Related guide →Deduction
An amount subtracted from your income before tax is figured. Its value depends on your tax bracket.
Related guide →Dependent
A qualifying child or relative you support and can claim on your return, which can unlock credits and a better filing status.
Related guide →Estimated tax payments
Payments you send the IRS during the year on income that has no withholding, like side business income. Usually due four times a year.
Related guide →Filing status
Your category on the return: single, married filing jointly, married filing separately, head of household or qualifying surviving spouse. It sets your standard deduction and brackets.
Related guide →Form 1099
A family of forms reporting income other than wages, such as contractor pay (1099-NEC), payment app sales (1099-K) or interest (1099-INT).
Related guide →Form W-2
The form your employer sends showing your wages for the year and the taxes withheld.
Related guide →Form W-4
The form you give your employer to set how much federal income tax is withheld from your pay. You can update it anytime.
Related guide →Head of household
A filing status for unmarried people who pay more than half the cost of a home for a qualifying person. It has better rates than single.
Related guide →Itemized deductions
Specific expenses listed on Schedule A, such as mortgage interest, state and local taxes and charitable gifts. You take them instead of the standard deduction when they add up to more.
Related guide →Marginal tax rate
The rate on your last dollar of taxable income. Moving into a higher bracket only raises the tax on the income inside that bracket.
Related guide →Modified adjusted gross income (MAGI)
Your AGI with certain items added back. Different tax breaks use different versions of MAGI to decide who qualifies.
Related guide →Nonrefundable credit
A credit that can lower your tax to zero but can't give you money back beyond that.
Related guide →Phase-out
The income range where a deduction or credit gets smaller and smaller until it disappears.
Related guide →Refundable credit
A credit that can pay you even if you owe no tax, like part of the child tax credit or the earned income credit.
Related guide →Required minimum distribution (RMD)
The amount you must withdraw each year from most retirement accounts once you reach the required age, generally 73 today.
Related guide →Schedule 1-A
A new schedule for 2025 through 2028 that holds the deductions for tips, overtime, car loan interest and seniors.
Related guide →Schedule C
The form for reporting profit or loss from a business you run on your own, including most side hustles.
Related guide →Self-employment tax
Social Security and Medicare tax paid by people who work for themselves, covering both the employee and employer shares.
Related guide →Standard deduction
A flat amount you can subtract from income based on your filing status, with no receipts needed. It changes every year.
Related guide →Taxable income
Your AGI minus your deductions. This is the amount your tax is figured on.
Related guide →Withholding
Tax your employer takes out of each paycheck and sends to the IRS for you, based on your W-4.
Related guide →Sources
Last updated: November 14, 2026This page was written from the sources below. Official sources are from the IRS or another government body; secondary sources are tax publications used to cross-check new rules. Tax law changes, so always confirm with the official source for the year you're filing.
- OfficialIRS Publication 17, Your Federal Income Tax
- OfficialIRS, Instructions for Form 1040 (2025)