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Tax Credit

A direct reduction in the amount of income tax owed, dollar-for-dollar. Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax bill itself.

Internal Revenue Code of 1986

The main body of federal tax law in the United States, which outlines all rules and regulations for taxation.

Principal Residence

The main home where a taxpayer lives, as opposed to a vacation home or rental property.

National Flood Insurance Act of 1968

The law that established the National Flood Insurance Program (NFIP), which provides flood insurance to property owners in participating communities.

Phaseout

A mechanism that gradually reduces the amount of a tax credit, deduction, or other tax benefit as a taxpayer's income increases above a certain threshold.

Joint Return

A single tax return filed by a married couple, combining their incomes and deductions.

Taxable Year

The annual accounting period for which federal income tax is calculated and paid, typically the calendar year for most individuals.