Income Tax
Also called: federal income tax, state income tax
Money you pay to the government based on what you earn. It helps pay for things like roads, schools, and parks.
Example
Part of each paycheck goes to income tax before it hits your account.
Why it matters
Knowing how taxes work helps you keep more of your money, and helps you avoid surprises.
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More in Taxes
Earned Income Tax Credit (EITC)
A tax credit for people who work and earn low to middle pay. It can mean a bigger refund, and it helps families with kids the most.
Tax Credit
Money taken right off the tax you owe. It is often worth more than a deduction.
Tax Deduction
A cost you can subtract from your income, so you pay tax on less money.
Tax Refund
Money the government gives back if you paid too much tax during the year. It is your money coming back to you.
For learning, not personal financial, tax or legal advice. Rules and limits can change each year, so check official sources (like IRS.gov or your plan's documents) or a trusted pro before big decisions.