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Above-the-line deduction

A type of tax deduction that reduces your gross income before calculating your Adjusted Gross Income (AGI). This means you can take it even if you don't itemize other deductions on your tax return.

Internal Revenue Code of 1986

The official body of law that covers all federal tax laws in the United States.

Itemize deductions

To list out specific eligible expenses (like mortgage interest, state and local taxes, or charitable contributions) on your tax return instead of taking the standard deduction. Only those whose itemized deductions exceed the standard deduction benefit from itemizing.

Adjusted Gross Income (AGI)

Your gross income minus certain specific deductions, often called 'above-the-line' deductions. AGI is a key number used to determine eligibility for many tax credits and other deductions.

Medical care

As defined by tax law, it generally includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. Health insurance premiums fall under this definition.

Taxable year

The annual accounting period for keeping records and reporting income and expenses. For most individual taxpayers, the taxable year is the calendar year (January 1 to December 31).