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April 9, 2018 Facebook Twitter LinkedIn Google+ Tax Terms


A tax on products imported from foreign countries.
taxable interest income
Interest income that is subject to income tax. All interest income is taxable unless specifically excluded.
tax avoidance
An action taken to lessen tax liability and maximize after-tax income.
tax code
The official body of tax laws and regulations.
tax credit
A dollar-for-dollar reduction in the tax. Can be deducted directly from taxes owed.
tax cut
A reduction in the amount of taxes taken by the government.
tax deduction
An amount (often a personal or business expense) that reduces income subject to tax.
Required payments of money to governments that are used to provide public goods and services for the benefit of the community as a whole.
tax evasion
A failure to pay or a deliberate underpayment of taxes.
tax-exempt interest income
Interest income that is not subject to income tax. Tax-exempt interest income is earned from bonds issued by states, cities, or counties and the District of Columbia.
tax exemption
A part of a person’s income on which no tax is imposed.
tax liability (or total tax bill)
The amount of tax that must be paid. Taxpayers meet (or pay) their federal income tax liability through withholding, estimated tax payments, and payments made with the tax forms they file with the government.
tax preparation software
Computer software designed to complete tax returns. The tax preparation software works with the IRS electronic filing system.
tax shift
The process that occurs when a tax that has been levied on one person or group is in fact paid by others.
telephone tax refund
Taxpayers are eligible to file for refunds of all excise tax they have paid on long-distance service billed to them after Feb. 28, 2003.
tip income
Money and goods received for services performed by food servers, baggage handlers, hairdressers, and others. Tips go beyond the stated amount of the bill and are given voluntarily.
transaction taxes
Taxes on economic transactions, such as the sale of goods and services. These can be based on a set of percentages of the sales value (ad valorem-sales taxes), or they can be a set amount on physical quantities (“per unit”-gasoline taxes).
To send a tax return to the IRS electronically. Tax returns prepared on paper can be sent through the mail.
Sends the electronic return data directly to the IRS.