If you are like us, just the words used on tax forms are intimidating. There are also some important differences that apply to families and people with disabilities. Here are explanations of a few commonly used tax terms:

Adjusted Gross Income (AGI) - is all the income you receive over the course of the year such as wages, interest, dividends and capital gains minus things such as contributions to a qualified Individual Retirement Account (IRA), some business expenses, moving costs and alimony payments that are not considered taxable.

Benefits such as Social Security Disability Insurance (SSDI) - Supplemental Security Income (SSI), military disability pensions, and payments from individually purchased disability insurance policies are generally not taxed. However, a person who receives long-term, employer-paid disability benefits and is under minimum retirement age must pay taxes on this income, but can also qualify for the Earned Income Tax Credit, even if they did not work during the tax year.

Asset - is a useful or valuable quality, person, or thing; an advantage or resource such as a home, a business, or an education. In tax terms, an asset is usually referred to as something having economic value that is owned or controlled with the belief that it will provide future benefit.

Capital Gain - is the profit from the sale of property as stocks, mutual-fund shares and real estate. Gains from the sale of assets owned for 12 months or less are "short-term gains" and are taxed at your top tax bracket, just like salary.

Long-term capital gains are usually taxed at a lower rate than other taxable income, largely to encourage entrepreneurship and investment in the economy.

Child Tax Credit (CTC) - A credit given to taxpayers for each dependent child that is under the age of 17. A child claimed for the CTC, including a child with disabilities, must be under age 17 at the end of the year. The "Additional" CTC may be refundable, based on a person's income. New for the 2006 filing season is the requirement that a child reside with the working parent for more than half of the year to be considered a qualifying child.

Child- and Dependent - Care Tax Credit- Not to be confused with the child tax credit, this one offsets part of the cost of paying for care for a child under the age of 13 or disabled dependent while you work.

What that means for people with disabilities is that it is available to cover care of your spouse in your home or of a child over 13 when the spouse or older children is "incapable of self-care". This means being unable to do things like feed or dress oneself or in danger of harm to self. You do not have to document the nature of the disability on the form used to claim the credit, although you need to be able to justify the claim if asked.

Credit for the Elderly or the Disabled - A credit is available to low-income individuals if they are at least age 65 or older before the end of the year, and to individuals under age 65 if they are retired with a disability and have taxable disability income from a public or private employer.

Deduction - Expenses you are permitted to subtract from your AGI to determine your taxable income. Taxable income is what is left after deductions are subtracted. All taxpayers may claim a standard deduction amount. If your qualifying expenses exceed your standard deduction, you may claim the higher amount by itemizing your deductions. Although no records are needed to back up your right to the standard deduction, you must maintain records of qualifying expenditures if you itemize.

For example, if you make $40,000 and you have a deduction for $1,000, then your taxable income is reduced to $39,000.

Disabled - According to the Internal Revenue Service, a person is permanently and totally disabled if both of the following apply:

He or she cannot engage in any substantial gainful activity because of a physical or mental condition; and

A physician determines that the condition has lasted or can be expected to last continuously for at least a year or can lead to death.

Be aware that this definition only applies to certain provisions, such as the Credit for the Elderly and the Disabled and not to others such as work incentives.

Exemption - A type of deduction allowed by law to reduce the amount of income that would otherwise be taxed. An exemption is based on a status or circumstance rather than economic standing.

An example of an exemption is the reduction in taxes you are granted for the dependent children living with you.

Earned Income Tax Credit (EITC) - The Earned Income Tax Credit, sometimes called the "Earned Income Credit (EIC)", is a refundable income tax credit for low-income individuals and families with earned income. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. The value varies according to family size and the amount of income.

A worker's eligibility to claim children for the EITC is not affected by the fact that the child receives SSI payments. New for the 2006 filing season is the requirement that a child reside with the working parent for more than half of the year to be considered a qualifying child. A person with total and permanent disabilities who has earned income may be eligible to claim the EITC, if the eligibility rules are met. However, if that person lives with parents or other relatives who can claim him or her as a qualifying child, the disabled worker is not eligible to claim the EITC.

EITC does not count as income for most public benefits programs (including SSI and SSDI). The refund does not count as an asset (resource) in the month it is received and the following month for most benefit programs- for SSI, it does not count for 9 months. After this time, the refund can count as an asset and affect the amount of benefits a person receives.

Dependent - A person who relies on someone else for financial support. The taxpayer supporting the dependent is allowed to claim dependency exemptions. Generally, dependents are people under 14 and over 65, except in the case of disability

Itemized deductions - Expenses that can be deducted from your AGI to help you reach a smaller income amount upon which you must calculate your tax bill. Itemized deductions include medical expenses over a certain amount, other taxes (state, local, property and sales tax), mortgage interest, charitable contributions, casualty and theft losses, unreimbursed employee expenses and miscellaneous deductions such as impairment-related work expenses and gambling losses. Some itemized deductions must meet IRS limits before they can be claimed. When you itemize, you must file Form 1040 and detail your deductions on Schedule A.

Refundable Tax Credit - Refundable credits allow you to not only reduce your taxes owed to zero, but also to get money back from the IRS. Examples include the Earned Income Tax Credit and an additional part of the Child Tax Credit, which is based on income.

Standard deduction - This is a fixed dollar amount that a taxpayer can subtract from his or her income. The standard deduction is available to all filers and is determined by the taxpayer's filing status. The amounts change each year because of inflation adjustments; you can find the current standard deduction levels listed on each of the three individual tax forms. This deduction method is used by most taxpayers and eliminates the need for them to itemize actual deductions such as medical expenses, charitable contributions or state and local taxes. If you are legally blind, you receive an additional amount for your standard deduction.

Qualifying Child- Sons, daughters, stepchildren, grandchildren and adopted children qualify. In addition, brothers, sisters, stepbrothers, or stepsisters - as well as descendants of such relatives. They must be under age 19 or under age 24 if they are full-time students. Children of any age who have total and permanent disabilities also may be qualifying children. Valid Social Security numbers are required for qualifying children born before December 31, 2005.

New for the 2006 filing season is the requirement that a child reside with the working parent for more than half of the year to be considered a qualifying child.

Tax - An involuntary fee collected from corporations or individuals in order to pay for government activities.

Tax Bracket - The rate at which an individual is taxed based on their income level.

Tax Credit - A dollar-for-dollar reduction in the tax payment required from a person. Tax credits are more valuable than deductions because they directly cut the amount of tax you owe, rather than reducing the amount of taxed income. Deductions and exemptions only reduce the amount of your income that is taxable.

For example, if you owe $1,000 in taxes and qualify for a credit that is worth $500, then you will only have to pay $500 in taxes.

Withholding - Also known as pay-as-you-earn taxation, the method by which taxes are taken out of your wages or other income as you earn it and before you receive your paycheck. These withheld taxes are deposited in an IRS account and you are credited for the amount when you file your return.