Your adjusted gross income (AGI) is a special calculation of income that is determined when above-the-line deductions are subtracted from your gross i... [Read More]

You receive a deduction for the amount of alimony you pay to your former spouse. Alimony does not include child support payments or property settlemen... [Read More]

These are tips that your employer is required to pay to you if you work in a restaurant, cocktail lounge or similar business. The normal calculation i... [Read More]

IRS Tax law gives preferential treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. Taxpayers who b... [Read More]

This credit modifies the Hope Credit for tax years 2009 and 2010. It adds required course materials to the list of qualifying expenses. The credit can... [Read More]

Almost everything you own and use for either personal or investment purposes is a capital asset. Examples are your house, car, stock or bonds, mutual ... [Read More]

Report any losses from unforeseen and unfortunate disasters such as fire, theft, flood, hurricane, etc. [Read More]

A cash contribution to a recognized charitable organization. The IRS requires that you maintain a written acknowledgment in your own records for eac... [Read More]

A non-cash donation of items or services to a recognized charitable organization.The IRS requires that you maintain a written acknowledgment in your ... [Read More]

Any item or expenditure subtracted from gross income to reduce the amount of income subject to tax. Deductions must meet certain criteria to be consi... [Read More]

Amount that taxpayers can claim for their eligible dependents. Each exemption reduces the income subject to tax. The exemption amount is a set amount ... [Read More]

As of 2005 the term dependent means either a Qualifying Child or a Qualifying Relative. You are allowed an exemption for each person you claim as a ... [Read More]

includes wages, salaries, tips, and net income from a business; it also includes taxable scholarship and fellowship grants. [Read More]

The transmission of tax information directly to the IRS using telephones or computers. Electronic filing options include (1) Online self-prepared usin... [Read More]

Electronic preparation means that tax preparation software and computers are used to complete tax returns. Electronic tax preparation helps to reduce ... [Read More]

The Authorized IRS e-file Provider that originates the electronic submission of an income tax return to the IRS. EROs may originate the electronic sub... [Read More]

An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to particip... [Read More]

If you're an employee, your employer withholds a part of your salary as taxes and sends it to the IRS and your state tax authority. Thus you pay taxes... [Read More]

Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions: personal and dependency. Ea... [Read More]

The category defining the type of tax-return form an individual will use. The filing status is closely tied to marital status. These are five filing s... [Read More]

Spending and income records and items to keep for tax purposes, including paycheck stubs, statements of interest or dividends earned, and records of g... [Read More]

You must meet the following requirements: 1. You are unmarried or considered unmarried on the last day of the year. 2. You paid more than half the cos... [Read More]

The Hope Credit allows up to $1650 for 2007 or $1800 ($3600 if a student in a Midwestern disaster area) for 2008 of credit for a student enrolled at l... [Read More]

It allows a portion of certain expenses to be deducted from your AGI much like the Standard Deduction. Money paid for medical care, mortgage interest,... [Read More]

The Lifetime Learning Credit allows up to $2000 of credit for a student enrolled in at least one course throughout the tax year. The course can be in... [Read More]

You are married and both you and your spouse agree to file a joint return. (On a joint return, you report your combined income and deduct your combine... [Read More]

You must be married. This method may benefit you if you want to be responsible only for your own tax or if this method results in less tax than a join... [Read More]

Amounts paid for qualified medical expenses that exceed 7.5% of AGI may be deducted. To qualify for a deduction, an expense must be paid during the ta... [Read More]

If you move for work related purposes, you can deduct travel costs, lodging, shipping of household items, etc. The distance between your new work plac... [Read More]

Dividends are what shareholders of a company get, as their part of the share of the company's profits. If you own stocks, mutual funds, or bonds, you ... [Read More]

You can take a deduction for job expenses you incur throughout the tax year that exceed 2% of your AGI. The following are the most common expenses tha... [Read More]

Can be claimed for the taxpayer and spouse. Each personal exemption reduces the income subject to tax by the exemption amount. A person who has been c... [Read More]

Your primary place of residence, where you live more than half the year, discounting vacation and travel. You can generally avoid paying capital gain... [Read More]

Deductible personal property taxes are only those based on the value of personal property such as a boat or car. The tax must be charged to you on a y... [Read More]

Those dividends for which the issuing company has already paid a certain amount of taxes. You will therefore be taxed for these dividends at a lower r... [Read More]

For purposes of the Hope Credit, Lifetime Learning Credit, and Tuition and Fees deduction, qualified education expenses are tuition and certain relate... [Read More]

In order to be considered a Qualifying Child, the child must meet the 4 tests set out by the IRS's Uniform Definition; they are as follows:
[Read More]

A qualifying relative is similar to a qualifying child in that it must meet several tests. Generally speaking, the Qualifying relative is a dependent... [Read More]

You can use this status if all of the following apply: Your spouse died in the last two years and you did not/will not remarry this year . You have a... [Read More]

The Railroad Retirement Board (or RRB) is an agency of the United States government created in the 1930s which established a retirement benefit progra... [Read More]

A Refundable tax credit is not limited by the amount of an individual's tax liability (i.e. Earned Income Credit, Child Tax Credit). A nonrefundable t... [Read More]

Self-employment income minus self-employment expenses. When the self-employment income is greater than expenses, the result is Self-employment profit... [Read More]

Similar to Social Security and Medicare taxes. The self-employment tax rate is 15.3 percent of self-employment profit. The self-employment tax is calc... [Read More]

If on the last day of the year, you are unmarried or legally separated from your spouse under a divorce or separate maintenance decree and you do not ... [Read More]

You can deduct any student loan interest you paid during the year on a student loan. It includes both required and voluntary interest payments. If you... [Read More]

For dependency test purposes, support includes food, clothing, shelter, education, medical and dental care, recreation, and transportation. It also in... [Read More]

An action taken to lessen tax liability and maximize after-tax income. [Read More]

The tax basis of property you buy is usually its cost. The cost is the amount you pay in cash, debt obligations, other property, or services. Your cos... [Read More]

The rate at which an individual is taxed due to a particular income level. Generally a higher income results in a higher tax rate. [Read More]

A failure to pay or a deliberate underpayment of taxes, punishable by IRS sanction and prosecution, etc. [Read More]

The amount of tax that must be paid. Taxpayers meet (or pay) their federal income tax liability through withholding, estimated tax payments, and payme... [Read More]

Interest income that is not subject to income tax. Tax-exempt interest income is earned from bonds issued by states, cities, or counties and the Distr... [Read More]

Generally, any interest that you receive, or that is credited to your account and can be withdrawn, is considered income that is taxable. Examples of ... [Read More]

You may subtract up to $250 of qualified expenses when figuring your adjusted gross income. Qualified expenses are unreimbursed expenses you paid or i... [Read More]

This refers to cash tips you get directly from customers, tips from customers using charge cards that your employer pays you, and the value of any non... [Read More]

The Tuition and Fees deductions may reduce your tax liability by up to $4000 dollars. The tuition and fees deduction is based on qualified education e... [Read More]

includes interest, dividends, capital gains, unemployment compensation, taxable Social Security benefits, pensions, annuities, and trust distributions... [Read More]

Above-the-line deductions are deductions ... [Read More]

Money, for example, that employers withhold from employees paychecks. This money is deposited for the government. (It will be credited against the emp... [Read More]