Taking the time to learn more about taxes is always a smart decision. However, the world of taxes is filled with terms that may be obscure for the uninitiated. That’s why today we’d like to share with you 7 essential tax terms.
Direct Deposit
This is considered the best and fastest way for taxpayers to get their refunds. This way, the money is electronically deposited into their financial accounts for free. Direct deposit is fast, simple, safe, and secure.
Electronic Preparation
This term refers to the use of dedicated software to complete tax returns. In addition to being fast, electronic preparation is also more precise, as it helps avoid errors.
To File a Return
To transmit by mail or electronically to the IRS taxpayer’s information about income and tax liability.
Filing Status
This is a category that determines the rate at which your income is taxed. There are five filing statuses:
- Single
- Married filing jointly
- Married filing separately
- Head of household
- Qualifying widow(er) with dependent child
Read this previous post to learn more about tax filing statuses.
Independent Contractor
A self-employed worker that performs services for others. The people who receive these services do not control the means of methods the independent contractor uses to perform the work, but they do decide whether the work is of acceptable quality.
Refund
This is the money that the IRS owes you when the amount of tax you pay is greater than the total tax.
Refundable Credit
When the amount of a tax credit is greater than the tax owed, then you can receive a “refund” for some of the unused credit.
Learn More About Taxes
These are some previous posts you can read to gain a better insight into the world of taxes.
- The importance of knowing your correct filing status.
- How to choose the right structure for a new business
- Beware of these tax-related scams!
- 3 Online resources you’ll need after filing your taxes
- Home office tax deduction: everything you need to know
- 5 Tips to keep in mind when you file your taxes
Contact the Experts at Meadville Tax Service
At Meadville Tax Service we have made it our mission to help you file your taxes efficiently, limiting your tax liability while staying compliant with federal tax regulations.
Our experts stand ready to assist you. Contact us today by email, telephone (814-333-2488), or through our social media accounts on Facebook, Twitter, and LinkedIn to learn more about our services.
