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Internal Revenue Code (IRC)

The official body of tax laws in the United States, which governs federal taxes.

Deduction

An amount that can be subtracted from your gross income to reduce the amount of income subject to tax, thereby lowering your overall tax bill.

Taxable Year

The accounting period for which taxes are calculated, usually a calendar year (January 1 to December 31) for individuals.

Itemized Deductions

Specific expenses that individual taxpayers can subtract from their adjusted gross income instead of taking the standard deduction, such as mortgage interest or state and local taxes.

Standard Deduction

A fixed dollar amount that taxpayers can subtract from their adjusted gross income if they choose not to itemize their deductions. Most taxpayers use this.

Employer Tax Credit

A direct reduction in the amount of tax owed by an employer, often designed to encourage specific behaviors or offset certain business costs.

Qualified Tips

For the purpose of this bill, these are cash tips reported to an employer, received in occupations traditionally and customarily receiving tips, and generally not from very high-earning employees.