Taxes: Understand Tax Rules, Planning, Deductions and Credits
Learn how taxes work, explore income taxes, tax brackets, deductions, credits, capital gains, payroll taxes, self-employment taxes, tax planning, tax filing, and other important tax concepts.
What Are Taxes?
Taxes are compulsory payments imposed by governments to raise revenue for public services, programs, infrastructure, and other government activities.
Tax systems differ significantly between countries and can also vary between states, provinces, municipalities, and other jurisdictions. Understanding the tax rules that apply to your situation can help you plan your finances and meet filing and payment obligations.
Tax rates, deductions, credits, filing requirements, deadlines, and eligible expenses can change over time and vary by jurisdiction. Always verify current rules with the relevant tax authority or a qualified tax professional.
Explore Tax Topics
Build your tax knowledge by exploring the major concepts that affect individuals, families, workers, investors, and businesses.
Income Tax
Learn how governments may tax income earned from employment, business activities, investments, and other sources.
Explore income tax →Tax Brackets
Understand how progressive tax systems can apply different rates to different portions of taxable income.
Explore tax brackets →Tax Deductions
Learn how qualifying deductions can reduce taxable income under applicable tax rules.
Explore tax deductions →Tax Credits
Understand tax credits and how they can reduce tax owed when applicable.
Explore tax credits →Capital Gains Tax
Learn about the tax treatment that may apply when investments or other capital assets are sold for a gain.
Explore capital gains tax →Payroll Taxes
Understand taxes and contributions that may be associated with employment income.
Explore payroll taxes →Self-Employment Taxes
Explore tax considerations that may apply to people earning income through self-employment or independent work.
Explore self-employment taxes →Property Tax
Learn about taxes that may be imposed on real estate and other taxable property.
Explore property taxes →Sales Tax
Understand consumption taxes charged on qualifying goods and services in jurisdictions where applicable.
Explore sales taxes →Estate Tax
Learn about taxes that may apply to the transfer of assets after death in jurisdictions where such taxes exist.
Explore estate taxes →Gift Tax
Understand the general concept of taxes that may apply to certain transfers of assets during a person's lifetime.
Explore gift taxes →International Tax
Explore tax considerations that can arise from cross-border income, investments, residency, and transactions.
Explore international tax →How Taxes Generally Work
The exact process differs by country and tax system, but understanding these basic concepts can make tax planning and filing easier.
Tax Deductions and Tax Credits
Deductions and credits are not the same thing. Understanding the distinction is important when learning how taxes are calculated.
Tax Deductions
Deductions generally reduce taxable income when the applicable rules allow them.
Learn about deductions →Tax Credits
Credits generally reduce tax liability directly when the taxpayer qualifies.
Learn about credits →Refundable Tax Credits
Learn about credits that may provide a refund when their value exceeds certain tax liability, depending on the tax system.
Explore refundable credits →Nonrefundable Tax Credits
Understand credits that generally cannot reduce tax liability below zero.
Explore nonrefundable credits →Taxes on Different Types of Income
Employment Income
Learn about tax considerations associated with wages, salaries, bonuses, and employment benefits.
Explore employment taxes →Self-Employment Income
Explore tax considerations for freelancers, contractors, and other self-employed workers.
Explore self-employment taxes →Investment Income
Learn about taxes that may apply to dividends, interest, capital gains, and other investment income.
Explore investment taxes →Rental Income
Understand general tax considerations associated with rental property income.
Explore rental income taxes →Business Income
Explore tax considerations that may apply to income generated by businesses.
Explore business taxes →Retirement Income
Learn about general tax considerations surrounding retirement distributions and income.
Explore retirement taxes →Capital Gains and Investment Taxes
Selling investments and other capital assets can have tax consequences. The exact rules depend heavily on the jurisdiction and the type of asset.
Capital Gains
Learn what a capital gain is and how it can arise when an asset is sold for more than its adjusted cost.
Explore capital gains →Capital Losses
Understand how investment losses may be treated under applicable tax rules.
Explore capital losses →Short-Term vs. Long-Term Capital Gains
Learn why the length of time an asset is held can affect tax treatment in some jurisdictions.
Compare capital gains →Investment Tax Planning
Explore general strategies investors may consider when thinking about taxes and investment decisions.
Explore investment tax planning →Taxes for Freelancers and Self-Employed Workers
People earning income outside traditional employment may have different tax reporting, payment, deduction, and record-keeping responsibilities.
Freelance Taxes
Learn general tax considerations for freelancers and independent workers.
Explore freelance taxes →Estimated Tax Payments
Understand the concept of making periodic tax payments during a tax year where required.
Explore estimated taxes →Business Expense Deductions
Learn how qualifying business expenses may be treated under applicable tax rules.
Explore business deductions →Tax Record Keeping
Learn why maintaining accurate financial and tax records is important.
Explore tax record keeping →Tax Planning
Tax planning involves considering the tax consequences of financial decisions before they are made, while following applicable laws and regulations.
Tax Filing and Tax Returns
How to File Taxes
Learn the general steps involved in preparing and submitting a tax return.
Learn how tax filing works →Tax Return
Understand what a tax return is and the information it generally contains.
Explore tax returns →Tax Refund
Learn why a taxpayer may receive a refund after filing.
Explore tax refunds →Tax Deadlines
Understand why filing and payment deadlines matter and why they vary by jurisdiction.
Explore tax deadlines →Use Financial and Tax Calculators
Explore calculators for income, tax estimates, investment returns, compound growth, retirement planning, savings, and other financial questions.
Related Personal Finance Topics
Budgeting
Learn how taxes and take-home income can affect a household budget.
Explore budgeting →Investing
Explore how taxes can affect investment returns and financial decisions.
Explore investing →Retirement Planning
Learn about the relationship between retirement savings, withdrawals, income, and taxes.
Explore retirement planning →Insurance
Understand how insurance and tax considerations can intersect in certain financial situations.
Explore insurance →Debt Management
Explore how taxes, income, debt payments, and cash flow can interact.
Explore debt management →Personal Finance
Return to the main Provenzy personal finance hub.
Explore personal finance →Tax FAQs
What is income tax?
Income tax is a tax imposed on certain types of income earned by individuals, businesses, or other entities under the rules of a particular jurisdiction.
What is a tax deduction?
A tax deduction generally reduces taxable income when the taxpayer qualifies under applicable rules.
What is a tax credit?
A tax credit generally reduces tax liability when the taxpayer qualifies under the applicable tax rules.
What is a tax bracket?
A tax bracket is a range of taxable income associated with a particular tax rate under a tax system that uses multiple rates.
What is a tax return?
A tax return is a document or electronic filing submitted to a tax authority reporting income, deductions, credits, taxes, and other required information.
What is a tax refund?
A tax refund generally occurs when the amount of tax already paid or credited exceeds the final tax liability, subject to the applicable rules.
What is capital gains tax?
Capital gains tax generally refers to tax that may apply to gains realized from selling certain capital assets, depending on the jurisdiction and circumstances.
Do tax rules change?
Yes. Tax rates, thresholds, deductions, credits, filing requirements, deadlines, and other rules can change. Always verify current information with the relevant tax authority.
Can I reduce my taxes legally?
Taxpayers may be able to reduce tax liability through deductions, credits, allowances, exemptions, tax-advantaged accounts, and other legally permitted provisions, depending on the jurisdiction and circumstances.