How Taxes Work
GPF 204 · Module 1
This module explains the basic mechanics of the U.S. federal income tax system. Students learn how progressive tax brackets work, how deductions and credits reduce taxes, how filing works, and how investment gains are taxed.
Lessons in this module
The Progressive Tax System
The U.S. federal income tax system uses brackets, which means different slices of income are taxed at different rates. This lesson explains marginal and effective tax rates with a realistic income example.
Deductions, Credits, and How to File
Deductions reduce taxable income, while credits reduce tax directly. This lesson explains the standard deduction, itemizing, common tax forms, filing steps, and why tax filing becomes easier when you understand the pieces.
Capital Gains Taxes
Capital gains taxes apply when you sell investments or assets for more than you paid. This lesson explains cost basis, short-term gains, long-term gains, losses, and why holding period can change tax treatment.
Ask your AI guide
Ask anything about Taxes & Tax Planning — How Taxes Work, or choose a suggested question below.
Finance chat is for educational purposes only and does not constitute financial advice. Press Enter to send, Shift+Enter for new line.