United States Financial Glossary

A retirement savings plan sponsored by an employer which lets workers save and invest a piece of their paycheck before taxes are taken out.

The process of spreading out a loan into a series of equal periodic payments. Each payment is divided into principal and interest.

Adjusted Gross Income. A key federal tax figure used to determine deductions, credits, and phaseouts before itemized deductions are applied.

Annual Percentage Rate. The yearly cost of borrowing money, including interest and fees, expressed as a percentage.

Profits from selling investments or assets, taxed at different rates depending on how long the asset was held.

A numerical rating (typically 300-850) that represents creditworthiness based on payment history and debt levels.

Federal Insurance Contributions Act. A US federal payroll tax deducted from paychecks to fund Social Security and Medicare programs.

The payroll form used to tell an employer how much federal income tax to withhold from each paycheck.

Health Savings Account. A triple-tax-advantaged account for medical expenses when paired with a high-deductible health plan.

Home Equity Line of Credit. A revolving credit line secured by your home equity, similar to a credit card.

Individual Retirement Account. A personal retirement savings account with tax advantages, available in Traditional and Roth versions.

Specific expenses like mortgage interest, state taxes, and charitable donations that can be deducted instead of the standard deduction.

Private Mortgage Insurance. Required insurance when a home buyer makes a down payment less than 20% of the purchase price.

A retirement account funded with after-tax dollars where qualified withdrawals in retirement are completely tax-free.

A fixed dollar amount that reduces taxable income, available to all taxpayers who don't itemize deductions.

Income tax withheld from wages throughout the year so taxpayers prepay part of their federal tax liability.