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Deduction

An amount that can be subtracted from your gross income to reduce your taxable income, which in turn lowers the amount of tax you owe.

Adjusted Gross Income (AGI)

Your gross income minus certain specific deductions, such as contributions to a traditional IRA or student loan interest. It's a key figure used to determine eligibility for various tax credits and deductions.

Taxable Year

The annual period for which you file an income tax return, typically a calendar year (January 1 to December 31) for individuals.

Non-Itemizer

A taxpayer who chooses to take the standard deduction rather than itemizing, or listing out, specific deductions like mortgage interest or charitable contributions.

Withholding

The money that an employer takes out of an employee's pay and sends directly to the government as a payment toward the employee's income tax liability.

Internal Revenue Code of 1986

The main body of federal tax law in the United States, which the Internal Revenue Service (IRS) administers.