Tax Terminology for Beginners

In conversations amongst my colleagues and friends, I've found that many people are not really aware of some of the basic terminology used in a tax return. While it's certainly not required to know all the terms used in the tax code, having basic knowledge of the meaning of the numbers you are calculating can clear up what is actually going on in your tax return. So here's my short list of tax terminology for beginners:

Total Income - Your gross income, before any deductions. Includes income from employment, investments, pensions, and government benefits.
Net Income - Your total income, after certain deductions have been applied. This number is used for determining eligibility for income-tested benefits, but is not used to calculate your personal income tax since it still contains some non-taxable income.
Taxable Income - Your net income, minus non-taxable income. Used to calculate your personal income tax.
Deduction - An expense that you declare (claim) on your tax return that is subtracted from your income when calculating your net income and taxable income. By reducing your taxable income, you reduce your tax paid.
Tax credit - A tax credit is applied directly to tax owing, reducing the amount you owe. This differs from a deduction in that a deduction reduces your taxable income.
Non-refundable tax credit - A tax credit that is not paid out as cash to you if it reduces your taxes owing to below zero.
RRSP - A plan provided by the government under which you can place investments that will grow tax-free. An RRSP is not a specific investment, or account, but acts like an umbrella. The size of your umbrella (contribution limit) is set by the CRA and anything (that is RRSP-eligible) that you put under it that fits in your contribution limit grows tax-free.
Adjusted Cost Base (ACB) - The cost of an item. This includes your purchase price, and costs related to the purchase. If you purchase the same item on more than one occasion, add the additional purchase prices and costs for those purchases. In a mutual fund (or ETF), if you receive distributions that are a Return of Capital, this will reduce your ACB, since your money is effectively being returned to you. Use the ACB to calculate your capital gains or losses when you sell the item.