Financial Glossary

A tax form issued to self-employed workers and independent contractors reporting non-employment income.

Adjusted Gross Income (AGI) is your total gross income minus specific deductions, used as the starting point for calculating your tax liability.

Business expense deductions are costs incurred in the ordinary course of operating a business that can be subtracted from taxable income to reduce the overall tax liability.

The average tax rate you actually pay on your total income.

Estimated tax payments are periodic tax payments made by individuals and businesses throughout the year on income that is not subject to withholding, such as self-employment income.

Federal payroll taxes funding Social Security and Medicare programs.

Total income from all sources before any deductions, taxes, or withholdings.

Specific individual deductions claimed instead of the standard deduction to reduce taxable income.

The tax rate applied to your last (or next) dollar of income.

A fixed amount of income that is exempt from federal income tax.

Schedule C is a tax form used by sole proprietors and single-member LLCs to report business income or loss.

A range of income taxed at a specific percentage rate in a progressive tax system.

A direct dollar-for-dollar reduction in the amount of taxes owed.

Gross income minus deductions — the amount used to calculate your actual tax liability.

The total amount of tax you owe to the government after all deductions and credits.

Tax deductions are expenses that taxpayers can subtract from their gross income to reduce their taxable income and overall tax liability.

A tax form issued by employers showing annual wages and taxes withheld.