Tax Terms You Need To Be Familiar With

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

It's that time of year once again, the time where everyone is busy making appointments with their accountants and collecting their W-2 forms so that they can file their taxes before the deadline. But even for those of you who work with someone to make sure the process is completed correctly, you should still take the time to learn many of the terms associated with the season so that you aren't confused about anything you read or hear regarding your own taxes.

To help you out, we've defined a few of the most common tax terms below:

Certified Public Account (CPA): A CPA is someone who holds a professional license granted by a state board of accountancy upon passing the Uniform CPA Examination and fulfilling the state's educational and professional experience requirements. 

Deduction: Deductions are any amounts that can be subtracted from either your gross income, a gross estate or a gift. If eligible for a deduction, you ultimately lower the amount of money which is taxed.

Federal Income Tax Bracket: The federal income tax bracket refers to the range of taxable income that is taxable at a certain rate. To date, there are seven brackets that you can fall into; they are: 10%, 15%, 25%, 28%, 33%, 35%, 39.6%.

Tax Deferred: When something is classified as "tax deferred," such as any interest, dividends or capital gains, it means that it will grow untaxed in your account or plan until it is withdrawn.

Taxable Income: Your taxable income is the amount of income used to compute your tax liability. To determine your taxable income, adjustments, deductions and personal exemptions are subtracted from your gross income.

For a complete list of tax terms and their definitions, be sure to check out our tax glossary.

In addition to providing you with some clarification on terms used heavily during tax season, we're also here to offer you access to IRS tax forms, IRS publications, information about federal tax rates and more! All you have to do is visit our website and view our tax library for a collection of important resources.

As you prepare for tax season, remember that you can always count on American Investment Planners LLC to help. For more information about the services we can offer surrounding your taxes, please call (516) 932-5130 today.