Whether you file your tax return on paper or choose to e-file this year, our minds get overwhelmed with so many words and terms that we barely understand, let alone ever use. So it's not surprising that doing your taxes may not exactly be your definition of a good time. Well here at Auto Credit Express, we aim to help simplify many things in your life. So, in order to help you out we've defined and explained a few terms that you may need to know this year for your returns.
7 Key Tax Terms You Need To Know
Adjusted Gross Income, or AGI, is your total yearly income before taxes are taken out. It includes your wages, interest, and capital gains. Things such as contributions to a qualified IRA, moving expenses, some business costs and alimony are not included.
Tax credits are similar to coupons you would use on your groceries. After you have calculated the total cost of your taxes, you can use credits you qualify for to lower the amount you owe the IRS.
Tax deductions are expenses that the Internal Revenue Service allows you to subtract from your AGI. Whether it's a standard deduction,
This is the amount the IRS allows you to subtract from your income to reflect the number of people that count on your income. You can claim yourself, your spouse or your dependents for a tax exemption.
This describes the belief that our tax system is based on: U.S.
Withheld taxes are taken out of your income or other wages as you earn it before you receive your check. They're deposited into an account with the IRS and you are credited for the amount when you file your tax return.
And there you have it; a few key terms defined that will certainly help you reduce your headache over the tax filing process. The refund you receive will allow you a great opportunity to define what your future can be like too. Here at Auto Credit Express, we understand that hard times during an even rougher economy may have left your credit in shambles. Bad credit does not mean you cannot purchase things you need now, like a new or used vehicle. A car, truck or SUV is an essential tool to get to and from work, the doctors, school or wherever else you and your family need to be. Use our easy online application and you'll see just how easy the process to rebuilding your credit can be. Apply today and drive away tomorrow!