10 Terms to Know for Tax Season 

Confused on tax terms? Read on to learn more!

There are many forms and terms to know when it comes to tax season. With a basic understanding of what each of the forms mean, and what makes up your tax return, you can be ready to file your taxes in no time. This list will guide you through the process of filing your taxes, so you can be ready to file or simply brush up on tax terms to grow your understanding.

• 1040 Forms
  Form 1040: The majority of taxpayers will use this form to report income and determine their tax for the year and any refund or additional tax owed.
  Form 1040-SR: This version is an optional alternative for senior taxpayers (age 65 and older). Form 1040-SR is nearly identical to Form 1040, but the text is larger and it includes a chart for determining the taxpayer's standard deduction.
  Form 1040-NR: This form is for nonresident aliens engaged in trade or business in the United States. You may also have to file this form if you represented a deceased person who would have had to file Form 1040-NR or represented an estate or trust. 
  Form 1040-X: This form is for taxpayers who need to make amendments to their Form 1040 for the current or two prior tax periods.
• Adjusted Gross Income
  Your adjusted gross income, or (AGI), is your gross income minus any deductions. It is used to calculate your total taxable income.
• Taxable Income
  Taxable income decides how much you owe in taxes, and is found by subtracting the tax deductions you qualify for from your gross income.
• Filing Status
  Your filing status, or your relationship status, determines the rate that your income is taxed. You can file as: single, married-filing jointly, married-filing separate, head of household, or qualifying widow(er) with child.
• Dependents
  Typically, you file your children and spouse as dependents, or people who rely on your income.
• Deductions
  Throughout the year, there are expenses that you will accumulate and the IRS allows you to subtract from your gross income. When it comes time to file your taxes, these are known as deductions. Common deductions that you may have are student loans, charitable donations, moving or other things. These are helpful, generally speaking, as less taxable income means a lower tax bill. Most people file their deductions in two separate ways:

-Standard deductions - This is a fixed dollar amount applied to your gross income, based off of your filing status.

-Itemized deductions - These are alternative deductions available if you choose to utilize standard deductions. This amount is decided by qualifying expenses, then subtracted from your gross income. When filing itemized deductions, you are required to fill out a 1040 and detail your individual deductions on another form called a Schedule A.

• Exemption
  The exemption is another amount subtracted from your gross income. Unlike deductions, this amount is based on the number of dependents you claim.
• W-4 Form
  At the start of any job, you will fill out a W-4 Form. The information on this form determines how much income tax will be taken out of your pay. Consider filling out a new Form W-4 each year or whenever your personal or financial circumstances change.
• W-2 Form
  Another tax form tied to your employment is your  , which your employer supplies for you to turn in with your 1040. The W-2 details the wages you’ve earned this year, your social security information, and the amount of federal and state income tax that was taken from your wages.
• Withholding
  Along with your paycheck comes the withholding, the amount that the government withholds from you on payday. This is designated towards your social security and income taxes, and is deducted based on your salary, found on your W-4.

Understanding these tax terms will help you prepare your mind (and your forms) to make this tax season a breeze.