Tax Terms You Need To Know

W-2 A form reporting one’s compensation (taxable wages) for the year. Filled out by the employer

W-4 Form an employee completes stating the number of deductions he/she has Example: Children

1040 EZ Simplest form used to file your taxes Taxable income must be below $100,000 Must be single or married filing jointly No dependents Interest income less than $1,500

Interest Income income earned through depositing money in savings programs, buying certificates of deposit (CDs) or bonds, or lending your money

1099-INT Statement you receive from payers of interest income (i.e. banks) that summarizes your interest income for the year

1040 Form used if taxable income is more than $100,000 Used if you are reporting self-employment income You are claiming income from sale of property

1040 A Form used for income taxes Used if you have capital gain distribution (selling item that was purchased for less than what you are selling it for Ex: property) Used if claiming tax credits

Earned Income Credit Tax credit for certain people that work and have low wages Must be single or married filing jointly Must be 25—65 Requirements: $43,352 ($48,362 married filing jointly) with three or more qualifying children $40,363 ($45,373 married filing jointly) with two qualifying children $35,535 ($40,545 married filing jointly) with one qualifying child $13,460 ($18,470 married filing jointly) with no qualifying children

Hope Scholarship Tax Credit a federal income tax credit based on the first $4,000 in postsecondary education expenses paid by the taxpayer during the tax year. provides a tax credit of up to $2,500 per student per year for qualified higher education expenses during the first four years of post-secondary education

Making Work Pay Credit Temporary tax credit Worth $400 Must not be claimed by someone as a dependent to be eligible.

Joint Return Income tax filing status that can be used by a married couple in which the income and deductions for the two individuals are combined

Deduction An item or expense subtracted from adjusted gross income to reduce the amount of income subject to tax Examples: Children, childcare expenses, student loan interest, business expenses

Alaska Permanent Fund The fund pays an annual dividend to all Alaska residents who meet eligibility requirements ($500-$2000) The Alaska Permanent Fund originates from surplus revenues gained from the development of Alaska’s oil and gas reserves.

Nontaxable Combat Pay Members of the military only Income you earn while performing military service in a designated combat zone is exempt from income tax

April 15 The day that your individual income tax return is due to the federal government. If April 15 falls on a weekend, they are due the next business day.