Glossary

Capital gains tax is the tax you pay on profits from selling assets, like stocks or real estate. It's important to understand so you can plan your finances effectively.

A capital loss carryover allows you to use investment losses that exceed your annual deduction limit to reduce your tax bill in future years. It's like a tax break that keeps on giving, helping you recover from a tough investment year.

The Child and Dependent Care Credit is a tax break that helps families offset the costs of childcare or care for other dependents, allowing them to work or look for work. It's a valuable resource for many households.

A dependent exemption was a way to reduce your taxable income for each qualifying child or relative you supported. This deduction has been replaced by the child tax credit, but understanding it helps put the current tax system in perspective.

Your filing status determines which tax rates, deductions, and credits you’re eligible for. Choosing the right one is key to minimizing your tax bill.

The First-Time Homebuyer Credit is a tax break designed to help people purchase their first home. It can provide a significant reduction in your tax liability and make homeownership more attainable.

Form W-2 is a vital tax document you receive from your employer, detailing your earnings and the taxes withheld from your pay for the year. This form is necessary to accurately file your annual tax return.

An IRS audit is an examination of your tax return by the IRS to verify its accuracy. While it can sound scary, understanding the process can help ease concerns.

The IRS collection process is the series of steps the IRS takes when you owe taxes and don't pay them on time. Understanding this process can help you avoid serious consequences and resolve your tax debt.