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Tax deductions introduction | Taxes | Finance & Capital Markets | Khan Academy

Video vocabulary

see

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US / si: /

UK / si /

A1
  • verb
  • To go on a date with someone
  • To predict whether something is, or will be true
  • To understand what someone says
  • To use your eyes to look at something
  • To visit a place often for sightseeing or pleasure
  • To visit or meet with someone
  • To find out by waiting or looking
  • To watch (a game, movie or TV show)

calculate

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US / 'kælkjʊleɪt /

UK / ˈkælkjəˌlet /

B2
  • verb
  • To find an answer using mathematics
  • To make an educated guess about something

deduction

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US / dɪˈdʌkʃn /

UK / dɪˈdʌkʃən /

B2
  • noun
  • Reaching of a conclusion by using reasoning
  • Fact of being or amount taken away from a total

could

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US / kəd /

UK / kʊd /

A1
  • other
  • Past form of 'can' to mean have ability
  • Used to ask for something politely, or to offer

have

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US / həv /

UK / hæv /

A1
  • verb
  • To drink, smoke, eat or use something
  • To experience the effects of something
  • To organize an event, or join in an activity
  • To own, possess, or hold something
  • To cause to happen or produce a particular effect

before

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US / bɪˈfɔ:(r) /

UK / bɪˈfɔr,-ˈfor /

A1
  • adverb
  • At a time earlier than the present; previously
  • conjunction
  • In advance of something happening
  • preposition
  • In front of someone or something

cover

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US / 'kʌvə(r) /

UK / ˈkʌvɚ /

A1
  • noun
  • A different version of another song
  • Bed sheets; blankets
  • (Police or military) protection from attack
  • Amount of money to be paid in an insurance claim
  • Thing you put over something to close or hide it
  • Front and back part of a book or magazine
  • Shelter built to protect from the natural elements
  • verb
  • To record a different version of another song
  • To include as part of its area
  • To put something over something to hide it
  • To discuss a subject in a talk or meeting
  • To form a layer over something so it is hidden
  • To have sufficient funds to pay for something
  • To include something within an agreed limit
  • To report news on TV, radio or in a newspaper
  • (Police or military) to protect from attack
  • To travel a certain distance in a given time
  • To wrap something with something, such as a cloth

know

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US / nəʊ /

UK / noʊ /

A1
  • verb
  • To be familiar with a person or place, thing
  • To feel sure or be convinced about something
  • To discover or be aware of something
  • To be able to distinguish
  • To have knowledge of things

confuse

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US / kənˈfju:z /

UK / kənˈfjuz /

A2
  • verb
  • To make something unclear or hard to understand

part

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US / pɑ:t /

UK / pɑ:rt /

A1
  • adjecitve
  • To some degree; half; not fully
  • noun
  • Division of a book
  • Ratio of something, e.g. 3 of gin, 1 of tonic
  • A line in a person's hair, made with a comb
  • Character an actor plays on stage, movie, or TV
  • Some, but not all of a specific thing
  • Role in causing something to happen
  • verb
  • To make a line in a person's hair, by using a comb
  • To move two things apart creating a space
  • To leave someone, or to break off a relationship

interest

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US / 'ɪntrəst /

UK / ˈɪntrɪst, -tərɪst, -ˌtrɛst /

A1
  • noun
  • Best or most advantageous thing for someone
  • Activity or subject one enjoys doing or learning
  • Fee for borrowing money
  • verb
  • To make someone want to know about something
  • To persuade to do, become involved with something

example

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US / ɪgˈzɑ:mpl /

UK / ɪɡˈzæmpəl /

A1
  • noun
  • Thing, person which represents a category

directly

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US / dəˈrektli /

UK / dɪˈrɛktli, daɪ- /

A2
  • adverb
  • In a frank and honest way
  • Right away; immediately

incremental

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US / ˌɪŋkrə'mentl /

UK / ˌɪŋkrə'mentl /

B2
  • adjecitve
  • Happening or growing bit by bit over time

tell

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US / tel /

UK / tɛl /

A1
  • verb
  • To (strongly) advise a person to do something
  • To be able to guess
  • To say or communicate information to someone
  • To inform, but without speaking; indicate
  • To have a negative effect on someone
  • To order someone to do something; command
  • To recognize something based on certain signs
  • To report something to an authority
  • To explain something or teach someone something

essentially

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US / ɪˈsenʃəli /

UK / ɪˈsenʃəli /

A2
  • adverb
  • Basically; (said when stating the basic facts)

happen

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US / 'hæpən /

UK / ˈhæpən /

A1
  • verb
  • To take place or occur

again

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US / ə'ɡen /

UK / əˈɡɛn /

A1
  • adverb
  • One more time, once more

misconception

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US / ˌmɪskənˈsepʃn /

UK / ˌmɪskənˈsɛpʃən /

B1
  • noun
  • Wrong or misunderstood idea

right

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US / raɪt /

UK / raɪt /

A1
  • adjecitve
  • Correct or true
  • The south side of you looking at the rising sun
  • adverb
  • Exactly in a place or time
  • Being appropriate for a particular event
  • In a straight or direct manner
  • noun
  • Something you are legally or morally allowed to do
  • Ideal of what is just and good
  • Political view based on conservatism
  • verb
  • To fix something previously wrong or unjust
  • To make upright, as a boat that has turned over

people

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US / 'pi:pl /

UK / ˈpipəl /

A1
  • noun
  • Persons sharing culture, country, background, etc.
  • Men, Women, Children

that

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US / ðæt /

UK / ðæt, ðət /

A1
  • adjecitve
  • The person or thing being talked about
  • Used to identify something both the speakers know
  • adverb
  • Used to reinforce adjectives and adverbs
  • To such a degree
  • conjunction
  • Used to connect a noun clause
  • Used to introduce an adverbial clause
  • Used to introduce a noun clause
  • determiner
  • Used as a noun to refer to something
  • pronoun
  • Referring an object far away
  • Used to refer to the relative pronoun ‘which’

about

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US / ə'baʊt /

UK / əˈbaʊt /

A1
  • adverb
  • To be ready to; going to
  • Nearly; approximately; roughly
  • Near; next to; close to
  • In every direction; in the area of
  • preposition
  • Concerning or of (a topic)

get

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US / ɡet /

UK / ɡɛt /

A1
  • verb
  • To become affected by illness or disease
  • To begin to feel or understand an emotion or idea
  • To send or bring someone or something home, etc.
  • To go somewhere to obtain something
  • To (cause to) do a particular thing
  • To obtain, receive or be given something
  • To currently have
  • To prepare for use
  • To understand something being said or read

what

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US / wɒt /

UK / hwɑt, hwʌt, wɔt, wʌt,hwət, wət /

A1
  • pronoun
  • Thing or things that; the same kind as
  • Used to emphasize something you are about to say
  • adjecitve
  • Used to refer to a particular amount, or number
  • Used to place emphasis on a particular quality
  • adverb
  • To a certain degree
  • determiner
  • Question words used for asking for information
  • exclamation
  • Used to express excitement, shock, or surprise
  • Used to ask people to repeat something they said

will

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US / wɪl /

UK / wɪl /

A1
  • noun
  • Desire or choice of someone
  • Document saying who gets your money when you die
  • Strong desire to do something; determination
  • Desire to do something; strong wish to do
  • other
  • Used with verbs to express the future
  • verb
  • To leave property to someone after your death
  • To use mental effort to make something happen
  • Am (is, are) likely to do
  • To influence someone to do something
  • To make something happen by strongly wanting it

already

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US / ɔ:lˈredi /

UK / ɔlˈrɛdi /

A1
  • adverb
  • Having happened or been done before this time

scenario

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US / sɪˈnɑː.ri.əʊ /

UK / səˈner.i.oʊ /

B1
  • noun
  • An imagined sequence of events in a plan/project

bracket

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US / ˈbrækɪt /

UK / ˈbrækɪt /

B2
  • noun
  • Placement of a word or words within ( ) [ or ]
  • Category including a range of people/things
  • 90ツー piece of metal used to support a shelf, etc.
  • verb
  • To place a word or words within ( ) [ or ]
  • To put into the same category or range together

plus

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US / plʌs /

UK / plʌs /

A2
  • noun
  • A benefit or advantage
  • preposition
  • In addition; add
  • In addition to; Indicates a number above
  • Having a value greater than zero

new

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US / nju: /

UK / nu, nju /

A1
  • adjecitve
  • Not old, recently born, built or made
  • Being or doing something for the first time
  • Not felt, seen or known previously
  • Having been recently bought or obtained

here

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US / hɪə(r) /

UK / hɪr /

A1
  • adverb
  • In this place; at this location, position or time

tax

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US / tæks /

UK / tæks /

A2
  • noun
  • Money taken by a government from its people
  • verb
  • To require a lot of physical or mental effort
  • (Government) to take money from a country's people

many

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US / 'menɪ /

UK / ˈmɛni /

A1
  • determiner
  • Used to refer a large number of things

someone

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US / ˈsʌmwʌn /

UK / ˈsʌmˌwʌn, -wən /

A1
  • pronoun
  • Person who is not known or named

previous

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US / ˈpri:viəs /

UK / ˈpriviəs /

A2
  • adjecitve
  • Existing or happening before the present time

should

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US / ʃʊd /

UK / ʃʊd /

A1
  • other
  • Used to indicate what is proper or reasonable

once

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US / wʌns /

UK / wʌns /

A1
  • adverb
  • One time; one instance
  • At a time in the past
  • conjunction
  • When; as soon as

deductible

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US / dɪˈdʌktəbl /

UK / dɪˈdʌktəbl /

B2
  • adjecitve
  • Acceptable as a deduction (from tax that is due)

either

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US / ˈaɪðə(r) /

UK / ˈiðɚ, ˈaɪðɚ /

A1
  • adjecitve
  • One of two (used when there is a choice of two)
  • adverb
  • (After negative statements) likewise, in addition
  • conjunction
  • Used as the first of two connected things
  • determiner
  • Used as the first of two connected things
  • pronoun
  • The one or the other

exactly

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US / ɪgˈzæktli /

UK / ɪɡˈzæktli /

A1
  • adverb
  • No more and no less than; precisely

too

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US / tu: /

UK / tu /

A1
  • adverb
  • In addition, also; with emphasis
  • Say that something is more than you want

two

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US / tu: /

UK / tu /

A1
  • number
  • 2

calculation

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US / ˌkælkjuˈleɪʃn /

UK / ˌkælkjəˈleʃən /

B2
  • noun
  • Process or result of using mathematics
  • An educated guess about something

out

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US / aʊt /

UK / aʊt /

A1
  • adverb
  • No longer stylish (e.g. fashion)
  • Away from home, business, or the usual place
  • In a direction/movement away from inside or center
  • noun
  • Act when a batter cannot continue playing
  • verb
  • To tell people a secret

think

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US / θɪŋk /

UK / θɪŋk /

A1
  • verb
  • To have an idea about something without certainty
  • To have an idea, opinion or belief about something

real

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US / rɪəl /

UK / ˈriəl, ril /

A1
  • adjecitve
  • Actually existing or happening, not imagined
  • Being important or special

and

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US / ənd /

UK / ənd, ən,ænd /

A1
  • conjunction
  • Used to refer to two or more things
  • Plus; in addition; on top of that
  • Used to introduce an action that follows another

money

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US / 'mʌnɪ /

UK / ˈmʌni /

A1
  • noun
  • Coins or notes we use to pay for things

only

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US / ˈəunli /

UK / ˈonli /

A1
  • adverb
  • Just one; just that amount or thing; not more than
  • Not very important or serious
  • Just that type of thing, person
  • Short time ago; not before a certain time
  • conjunction
  • Except; but

another

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US / əˈnʌðə(r) /

UK / əˈnʌðɚ /

A1
  • adjecitve
  • One more, but not this
  • determiner
  • One more added
  • pronoun
  • One more (thing)

where

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US / hwɛə /

UK / hwɛr, wɛr /

A1
  • conjunction
  • At or in the place which
  • In whatever place
  • pronoun
  • Word you use to ask the location of something

hopefully

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US / ˈhəʊpfəli /

UK / ˈhopfəli /

A2
  • adverb
  • In a manner wishing something to happen

base

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US / beɪs /

UK / bes /

A2
  • noun
  • Place military personnel live, train, and operate
  • Bottom part of an object that touches a surface
  • Unit of counting, e.g. 10 for counting
  • Most important idea or ingredient to add others
  • Origin or start from which something came
  • Main place where an organization or a person works
  • verb
  • To use as the starting point or origin for
  • To have as the main location for (company, etc.)

from

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US / frəm /

UK / frʌm, frɑm,frəm /

A1
  • preposition
  • Starting at a particular place, time or level

come

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US / kʌm /

UK / kʌm /

A1
  • verb
  • To arrive at a place
  • (Of mail) to be delivered
  • To move toward someone; go with someone
  • To reach a certain point or state

most

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US / məʊst /

UK / most /

A1
  • adverb
  • Very; extremely
  • Greatest possible degree
  • pronoun
  • Nearly all of something

spend

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US / spend /

UK / spɛnd /

A2
  • verb
  • To use money to pay for something
  • To use time in order to do something
  • To use up something completely

deduct

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US / dɪ'dʌkt /

UK / dɪˈdʌkt /

B2
  • verb
  • To take some amount away from a total

mortgage

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US / 'mɔ:ɡɪdʒ /

UK / ˈmɔrɡɪdʒ /

B1
  • noun
  • Long-term loan from a bank for buying property

just

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US / dʒʌst /

UK / dʒʌst /

A1
  • adjecitve
  • Proper or appropriate; as is deserved
  • Doing or being what is right or fair
  • Legally correct; having enough evidence
  • adverb
  • Almost; nearly
  • Exactly at the time of
  • Exactly (the same as, like)

much

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US / mʌtʃ /

UK / mʌtʃ /

A1
  • adjecitve
  • Very; to a high level or degree
  • adverb
  • A lot; large amount; a high degree of
  • Nearly; basically
  • On many occasions; often
  • noun
  • A large amount; a great quantity

amount

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US / ə'maʊnt /

UK / əˈmaʊnt /

A1
  • noun
  • Quantity of something
  • verb
  • To add up to a certain figure

anyway

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US / ˈeniweɪ /

UK / ˈɛniˌwe /

A1
  • adverb
  • A word used to change the topic of a conversation

since

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US / sɪns /

UK / sɪns /

A1
  • adverb
  • At a point before the present time
  • conjunction
  • For this reason; because
  • preposition
  • From the time in the past that

through

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US / θru: /

UK / θru /

A2
  • adjecitve
  • having finished using or doing something
  • adverb
  • From the beginning of something until the end
  • preposition
  • Over, in, across an entire thing or place
  • Allowing you to pass between, or to
  • By a particular way or process; by the use of

report

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US / rɪ'pɔ:t /

UK / rɪˈpɔrt, ˈport /

A1
  • noun
  • Account of the necessary facts and information
  • The telling of news in the media
  • Official statement about something
  • verb
  • To submit a report or bill to the government
  • To write in a newspaper or speak on a news program
  • To state something officially
  • To officially present yourself to an authority
  • To describe something by telling it to others

time

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US / taɪm /

UK / taɪm /

A1
  • noun
  • Speed at which music is played; tempo
  • Point as shown on a clock, e.g. 3 p.m
  • Number of hours, minutes needed to do something
  • Occasion when something happens
  • Period or occasion that something occurred
  • Period in history or the past
  • Something measured in minutes, hours, days, etc.
  • How long an event takes; duration
  • verb
  • To check speed at which music is performed
  • To choose a specific moment to do something
  • To measure how long an event takes, e.g. a race
  • To schedule something to occur at a specific moment

difference

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US / 'dɪfrəns /

UK / ˈdɪfərəns, ˈdɪfrəns /

A1
  • noun
  • A thing or issue that people do not agree about
  • Not of the same kind; unlike other things

calculator

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US / 'kælkjʊleɪtə(r) /

UK / ˈkælkjəˌletɚ /

B2
  • noun
  • A small electronic device used for calculation

well

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US / wel /

UK / wɛl /

A1
  • adjecitve
  • Being in a fortunate, good condition or state
  • Healthy and in good condition
  • adverb
  • In an acceptable, proper, or successful manner
  • In a complete, total, or full manner
  • A great and considerable degree
  • In a successful way, in a good or satisfactory way
  • exclamation
  • Used to begin or continue a particular statement
  • Used to show you want to start saying something
  • Used to express that you are waiting for a reply
  • You say this to change the topic of a conversation
  • Used to indicate you are making a final remark
  • noun
  • Long deep hole in the ground to get water
  • verb
  • To cause your eyes to fill with tears

their

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US / ðɛː /

UK / ðer /

A1
  • determiner
  • Belonging to them

show

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US / ʃəʊ /

UK / ʃo /

A1
  • noun
  • False display of love, emotion or action
  • An event for displaying or promoting goods
  • Play, opera or theater production
  • Presentation that is broadcast on TV or radio
  • verb
  • To be easily seen or displayed
  • To display your emotions or feelings
  • To let someone see something; display
  • To explain or teach how something is done
  • To lead someone somewhere; point them to something
  • To prove something to be true, correct
  • To reveal or allow something to be seen

pay

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US / peɪ /

UK / pe /

A1
  • noun
  • Money you receive from your job, work, etc.
  • verb
  • To give money for goods or work done
  • To give (attention, respect, etc.) to
  • To be punished or suffer for something you did
  • To make (a visit) to a person or place

they

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US / ðeɪ /

UK / ðe /

A1
  • pronoun
  • Two or more people, animals, or things

top

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US / tɒp /

UK / tɑp /

A1
  • adjecitve
  • Being good or great; excellent
  • Being the most in degree or quality
  • noun
  • Item of clothing covering shoulders to waist, hips
  • A cover or lid
  • Part (e.g. road) that is the furthest away
  • Highest or upper part or point of something
  • Best or highest status or position
  • Flat upper surface or edge of an object
  • Child's toy that spins on its point
  • Upper section or leaves of fruits and vegetables
  • Winning in a sport or contest
  • verb
  • To be higher or larger than a specific value
  • To arrive at the highest point of something
  • To put a cover or layer or over something
  • To kill; murder
  • To hold the highest position on a list
  • To be more important, successful or better than
  • To beat someone or win at a game

subtract

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US / səbˈtrækt /

UK / səbˈtrækt /

B2
  • other
  • To take away a value or amount from another
  • verb
  • To take away a value or amount from another

work

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US / wɜ:k /

UK / wɚk /

A1
  • adjecitve
  • Activity completed in order to make money
  • noun
  • The product of some artistic or literary endeavor
  • Everything created by an author, artist, musician
  • Activity you do in order to make money
  • Place of employment
  • Final product or result of a some labor or effort
  • verb
  • To bring into a specific state of success
  • To be functioning properly, e.g. a car
  • To do your job in your company or workplace
  • To make an effort to do something
  • To operate a machine or device

old

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US / əʊld /

UK / old /

A1
  • adjecitve
  • Having existed for a long time, not young or new
  • Age of a person since birth

way

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US / weɪ /

UK / we /

A1
  • adverb
  • Used to emphasize the amount of something
  • noun
  • Particular aspect of something being thought about
  • One of various choices that could be made
  • Particular existing condition or state
  • (Often long) distance or length of time
  • How something is done
  • Route to go to a place
  • Small street
  • Usual behavior, emotions or habits of someone

all

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US / ɔ:l /

UK / ɔl /

A1
  • adverb
  • Completely; totally
  • determiner
  • Being every one of something
  • pronoun
  • 100% of something; the complete amount

misunderstood

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US / ˌmɪsʌndə'stʊd /

UK / ˌmɪsʌndɚˈstʊd /

A2
  • verb
  • To fail to get the meaning correctly

look

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US / lʊk /

UK / lʊk /

A1
  • noun
  • Person's beauty or physical attractiveness
  • Particular style of dress, clothes, or appearance
  • The way someone, something appears to be
  • Act of searching for or examining something
  • verb
  • To appear to be; seem

common

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US / 'kɒmən /

UK / ˈkɑmən /

A1
  • adjecitve
  • Shared; Belonging to or used by everyone
  • Typical, normal; not unusual
  • noun
  • Area in a city or town that is open to everyone
  • Field near a village owned by the local community

between

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US / bɪˈtwi:n /

UK / bɪˈtwin /

A1
  • preposition
  • From one person, thing, or place, to another
  • In the space that separates two objects
  • Among two or more people who share something

year

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US / jə: /

UK / jɪr /

A1
  • noun
  • Unit of time equal to 12 months or 365 or 366 days
  • Used to refer to the age of a person

the

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US / ðə /

UK / ðə /

A1
  • article
  • Used to refer to something already mentioned
  • Used to show there is only one of something
  • determiner
  • Used to describe all of a family

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video

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our

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  • Subtitles section
  • In this video, I now want to cover one of the other most misunderstood ideas when people think about taxes, and that's the idea of deductions.
  • So, one of the most common tax deductions is the deduction you get on interest on your mortgage.
  • So let's say that this year on my mortgage-- of the part of my mortgage that is interest, let's say it's $10,000.
  • It is $10,000 on my interest on my mortgage.
  • And you'll either already know or someone might tell you that this is tax deductible.
  • And the misconception that I've seen many, many times is that people think that since this is a tax deduction, that this $10,000 should be deducted from their taxes.
  • So in the previous example, we showed the scenario where this person making $100,000 would have to pay $21,720 in taxes.
  • And so based on that misconception, they would say, OK, I get a $10,000 tax deduction, now I would pay $11,720.
  • And that is wrong.
  • The deduction doesn't happen from the taxes you pay.
  • The deduction happens from your stated income.
  • So if this person right here had a $10,000 tax deduction, instead of saying that they made $100,000 that year, they would say that they made $90,000.
  • So once again, the deduction does not come directly from the taxes.
  • That would be a tax credit.
  • The deduction comes from the reported income.
  • So what would be the actual effect on the taxes?
  • Well, we just have to look at this $90,000.
  • It still kind of shows up in that top bracket.
  • So the real difference is just going to be this $10,000 difference.
  • Before, he was paying 28% on this $10,000.
  • Now he won't have to pay 28% on that incremental $10,000.
  • Another way to think about it, instead of this being 17,750 times 28%, it would now be 7,750.
  • Because the reported income is now only $90,000.
  • So the actual number-- we can get our calculator out and just calculate it.
  • There's two ways you could do it.
  • You could just say, look, if I'm going to have spent 10,000-- if my income is deducted by 10,000, and I'm going to save 28% on that 10,000, you could just subtract 2,800 from this.
  • But just to show you how it'll all work, that it all works out to the same thing, let's just go through the same calculation again.
  • We have 7,750 times 0.28 plus 48,300 times 0.25 plus 25,600 times 0.15 plus $835.
  • And it's $18,920.
  • So now the taxes will be $18,920.
  • And as you can see, the difference between the old and the new is exactly $2,800 because that's essentially what the amount that we would be taxed on that $10,000 if we had made that much money.
  • Anyway, hopefully that doesn't confuse you too much.