The total amount of money you earn in a year from all sources before taxes are taken out. This includes your salary, wages, tips, bonuses, self-employment earnings, and other income like investments.

The standard deduction is a fixed dollar amount you can subtract from your income to reduce the portion that’s taxed. For 2024, the amounts are:

• Single or Married Filing Separately: $14,600
• Married Filing Jointly: $29,200
• Head of Household: $21,900 (A filing status for single or unmarried taxpayers who meet certain requirements*. It offers a larger standard deduction and lower tax rates than the single filing status.)

It simplifies the tax process by eliminating the need to itemize expenses.

The portion of your total income that is subject to federal income taxes. It’s calculated by subtracting allowable deductions (like the standard deduction or itemized deductions) from your total income. It’s the base amount used to figure out how much tax you owe.

Individuals you financially support, typically children but sometimes elderly or disabled relatives you care for. For example, having dependents can make you eligible for tax credits like the Child Tax Credit (CTC), reducing the taxes you owe or increasing your refund.

The total amount of federal income tax you owe to the government for the year. This is based on your taxable income and tax bracket. If your tax liability is higher than the taxes already withheld from your paycheck, you may owe money when filing your tax return.

A tax benefit for people with low to moderate incomes who work. The EIC can either reduce your tax liability or give you a refund if you owe no taxes. The amount depends on your income, filing status, and number of dependents.

A $2,000 tax credit that provides financial relief to parents or guardians for each qualifying child under age 18. Up to $1,700 of the CTC may be refundable, meaning you could get money back even if you don’t owe any taxes. It’s designed to help families with the costs of raising children.

The part of the American Opportunity Tax Credit (AOTC) is a $2,500 tax credit used to lower the amount of tax you owe and possible give you a refund. The AOTC helps pay for education expenses like tuition, fees, and required course materials. Up to $1,500 of the credit can be used to reduce your tax liability and the remaining $1,000 can be a part of your refund.

The combined value of all your tax credits, such as the EIC, CTC, and AOTC. These credits are used to lower your tax liability or increase your refund. The higher your total credits, the less you may owe in taxes and the more you may get as a refund.

The amount of money you still need to pay to the IRS when your total tax liability exceeds your tax payments and credits. This represents an unpaid balance that must be settled when you file your tax return.

The amount of money the government pays back to you if your tax payments (including withholdings and refundable credits) are greater than your total tax liability. Refunds occur when you’ve overpaid taxes or qualify for refundable credits like the EIC, CTC or AOTC.