Listen to a Business English Dialogue about Tax credits
Ryan: Hi Emma, do you know what adjusted gross income (AGI) is and why it’s important for taxes?
Emma: Yes, AGI is the total income you earn in a year minus certain deductions, such as contributions to retirement accounts or student loan interest.
Ryan: That’s correct. AGI is a key figure used to determine eligibility for various tax credits and deductions. Have you ever calculated your AGI before?
Emma: Yes, I have. It’s an essential step in filing my taxes accurately and ensuring I take advantage of all available deductions and credits.
Ryan: Absolutely. Understanding your AGI can also help you plan your finances more effectively throughout the year. Do you know how to calculate AGI?
Emma: To calculate AGI, you start with your total income, then subtract “above-the-line” deductions like contributions to retirement accounts or health savings accounts.
Ryan: Right. And once you have your AGI, you can use it to determine your taxable income and ultimately how much you owe in taxes. Are there any specific deductions or credits you find particularly helpful in reducing your AGI?
Emma: For me, contributions to retirement accounts and educational expenses are significant deductions that help lower my AGI and reduce my tax liability.
Ryan: Those are smart ways to reduce your tax burden while also planning for your future. Have you ever encountered any challenges or complexities when calculating your AGI?
Emma: Sometimes, navigating the various deductions and tax rules can be a bit confusing, but using tax preparation software or consulting with a tax professional can help simplify the process.
Ryan: That’s a good approach. Seeking assistance when needed can ensure accuracy and compliance with tax laws. Thanks for sharing your insights on AGI, Emma.