Since tax legislation changes on an annual basis, it is important to keep up with the laws and understand the associated vocabulary so you don't wind up paying more than you have to. For the best tax preparation services this side of the Rio Grande, count on Master Finance of San Marcos, TX, to get you through tax season.

Below are some crucial terms to understand when it comes to income tax preparation:

• Audit: Filling out your tax return properly helps you avoid an audit. An audit is what occurs when the IRS wants to double-check a person's returns to ensure all required income taxes have been paid. This is an unpleasant process because it’s time consuming, and you can wind up making additional payments if you made a mistake on your original tax return.
• Deductions & Credits: Make sure you don’t miss out on any income tax deductions or credits. A tax deduction is an amount subtracted from your gross taxable income. The government rewards people for investments such as getting a college education or owning a small business with tax deductions. A tax credit is deducted from the amount of taxes directly owed (instead of from the gross taxable income). This is even better and is given out for investments such as solar energy. Deductions and credits change annually, so be sure to keep up with the laws. 
• Dependent: The IRS also grants deductions for dependents. A dependent is a person who lives with you and has at least half of their expenses paid for by you. People often claim their children as dependents on their tax return. Make sure you include any dependents you have, since you’ll likely receive a hefty tax deduction for them. If you’re not sure if someone is a dependent, consult an income tax preparation expert.

These are some of the most commonly used tax terms. For more information regarding their tax preparation services and a free tax estimate during the month of November, call Master Finance of San Marcos at (512) 392-6102 or visit their website today.