Tax glossary

  • Follow Business

UNDERSTAND THE TERMS ON YOUR TAX FORMS

ADJUSTED GROSS INCOME: Gross income reduced by certain amounts, such as a deductible IRA contribution or student loan interest.

DEPENDENT: A qualifying child or relative, other than the taxpayer or spouse, who entitles the taxpayer to claim a dependency exemption.

ELECTRONIC FILING (E-FILE): The transmission of tax information directly to the IRS using computers.

EXEMPTIONS: Amount taxpayers can claim for themselves, spouses and eligible dependents. There are two types of exemptions: personal and dependency. Each reduces the income subject to tax.

FILING STATUS: Determines the rate at which income is taxed. The five statuses: single, married filing a joint return, married filing a separate return, head of household, and qualifying widow(er) with dependent child.

STANDARD DEDUCTION: Reduces the income subject to tax, and varies depending on filing status, age, blindness and dependency.

TAX CREDIT: A dollar-for-dollar reduction in the tax. Can be deducted directly from taxes owed.

TAX DEDUCTION: An amount (often a personal or business expense) that reduces income subject to tax.

WITHHOLDING ("PAY-AS-YOU-EARN" TAXATION): Money, for example, that employers withhold from employees' paychecks. This money is deposited for the government, and will be credited against the employees' tax liability when they file their returns. Employers withhold money for federal income taxes, Social Security taxes, and state and local income taxes in some states and localities.

E-FILING BY THE NUMBERS:

58 PERCENT

Number of tax returns filed electronically in 2008, about 90 million

$2,429

Average income tax refund in 2008

4.8 MILLION

Number of people who filed electronically for free through the IRS' Free File

66 MILLION

Number of refunds that were direct-deposited in 2008

FILE ELECTRONICALLY

If you file electronically and choose direct deposit, your refund will be in your bank account in 10 days.

"When you go the paper route, it can take four, six weeks, even longer to get that paper check in there," said IRS spokesman Terry Lemons.

If you owe money, you can pay your tax bill through direct electronic withdrawal from your bank account or by credit or debit card.


Top headlines

Charges for sex offender

A man convicted of sex charges in Columbia County, who then went to prison for child molestation in south Georgia is back behind bars.
Search Augusta jobs