1. Deductions and Credits  Deductions – recognized expenses that diminish revenue. for example, rent of a business or employee salaries.  Credits – sums that are deducted from the tax and provided as credit points. for example, every Israeli citizen is entitled to 2 credit points and 1/4 credit point for transportation (to work), and working women are entitled to an additional 1/2 credit point. 1 Taxes – Terms

2.  Examples of credits: 2 Single parent families Working mothers New immigrants Discharged soldiers Credit points Taxes – Terms

3. Tax Year The period for which the liable income and the tax due for it are calculated is a calendar year beginning on January 1 and ending on December 31 of each year.  A tax adjustment is required because tax calculation is made in annual terms. 3 Taxes – Terms

4. Marginal Tax and Tax Brackets  Division of income into classes.  Each class is called a Tax Bracket.  Each tax bracket is liable for a different tax rate. the higher the bracket, the higher its tax rate is - Progressive. When talking about the marginal tax rate, we're referring to the tax rate in the highest bracket. When talking about the marginal tax rate, we're referring to the tax rate in the highest bracket. 4 Taxes – Terms