Tax glossary

Tax year 2026

The calendar year whose income you generally report on the Form 1040 you file in 2027. The brackets and deduction amounts in Revenue Procedure 2025-32 apply to this year.

Withholding

Federal income tax already taken from pay and sent to the IRS, shown in Form W-2 box 2. It is a prepayment, not the tax itself.

Estimated tax

Quarterly payments you send the IRS when withholding is not enough. The fourth installment for a calendar-year taxpayer is ordinarily due on 15 January following the tax year.

Adjusted gross income (AGI)

Income minus certain above-the-line adjustments. Many credits and phase-outs start from AGI or a modified version of it.

Taxable income

AGI minus the standard deduction or itemized deductions, and minus other allowed below-the-line amounts. Ordinary tax tables apply to ordinary taxable income.

Standard deduction

A fixed subtraction you may take instead of itemizing. For 2026 it is $16,100 (single or married filing separately), $24,150 (head of household) or $32,200 (joint or surviving spouse), plus an extra amount for age 65 or blindness.

Marginal rate

The official rate that applies to the next dollar of ordinary taxable income, not the rate on every dollar you earn.

Effective rate

On this site, tax divided by the taxable income (or AGI) we specify on the page. Credits can make the rate after credits much lower.

Child Tax Credit

For 2026, a credit of up to $2,200 per qualifying child, with up to $1,700 potentially refundable as the additional Child Tax Credit, subject to phase-out and earned-income limits.

Credit for other dependents

A $500 nonrefundable credit for certain dependents who are not qualifying children for the main Child Tax Credit.

Additional Child Tax Credit

The refundable portion of the Child Tax Credit, generally limited to $1,700 per qualifying child in 2026 and to 15% of earned income over $2,500. An alternative formula on Schedule 8812 for some larger families is not modelled here.

Earned Income Tax Credit (EITC)

A refundable credit for workers with earned income in official ranges. 2026 maxima and phase-outs are in Revenue Procedure 2025-32. Investment income over $12,200 disallows it.

Refundable credit

A credit that can produce a refund even after income tax is zero. EITC and the additional Child Tax Credit are examples.

Nonrefundable credit

A credit that can reduce tax to zero but not below, such as the credit for other dependents.

Qualified dividend / long-term capital gain

Income that generally uses the 0%, 15% or 20% rates and the 2026 caps in section 4.03 of the revenue procedure, stacked on ordinary taxable income.

Schedule 1-A

The schedule used for tax years 2025–2028 to claim certain deductions for qualified tips, overtime, car-loan interest and seniors. Those amounts are computed on sister site NewDeduct and can be entered here as a below-the-line total.

IRS Free File

The official no-cost federal e-file program. Start at IRS.gov/freefile. In November 2026 the IRS said the program had closed and to check back in January 2027.

Where’s My Refund

The official IRS refund-status tool. The IRS says status is available 24 hours after you e-file a current-year return, with typical e-file timing of 3 weeks, subject to holds for some credits.

For sources of the 2026 dollar amounts see the methodology page and Revenue Procedure 2025-32.