GlossaryGuide

Tax Credit A dollar-for-dollar reduction in the tax. Can be deducted directly from taxes owed

Tax Code The official body of tax laws and regulations.

Tax Avoidance An action taken to lessen tax liability and maximize after-tax income.

Taxable interest income Interest income that is subject to income tax. All interest income is taxable unless specifically excluded.

Tariff A tax on products imported from foreign countries.

Support For dependency test purposes, support includes food, clothing, shelter, education, medical and dental care, recreation, and transportation. It also includes welfare, food stamps, and housing provided by the state. Support includes all income, taxable and nontaxable.

Standard Deduction Reduces the income subject to tax and varies depending on filing status, age, blindness, and dependency.

Software Developer Develops software for the purposes of (1) formatting electronic tax return information according to IRS specifications, and/or (2) transmitting electronic tax return information directly to the IRS.

Social Security Tax Provides benefits for retired workers and their dependents as well as for the disabled and their dependents. Also known as the Federal Insurance Contributions Act (FICA) tax.

Sin Tax A tax on goods such as tobacco and alcohol.