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Level 31

Tax Law


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Accelerated Depreciation
Rapid deprecation of the value of a capital asset in order to produce larger tax deductions during the early years of the life asset
Accrued Income
Income that a person has earned but has not yet claimed
Accrued Interest
Interest that has been earned but has not yet been paid
Ad Valorem Tax
A tax established in proportion to the value of the property to be taxed
Adjusted
Corrected;balanced;brought into line
Adjusted Basis
For the purpose of calculating the amount of income tax due, the original cost of property offset for such things as casualty losses and depreciation
adjusted gross income
gross income and interest and dividend income
Amended Return
Within the limitations prescribed by law, amend tax returns may be filed to correct inaccuracies and omissions in the original return
Amortized
The act of amortizing
Amortize
To gradually pay off debt by regular payments in fixed amount over fixed period of time
Appreciation
An increase in value of something
Assessment
Imposing of tax on the basis of a listing and valuation of the property to be taxed
Assessor
A public official who makes an assessment of property. usually for purpose of taxation
Audit
A formal or official examinstion and vitrifaction of accounts, vouchers, and other financial records
Aduitor
A person who conducts an audit
Back Taxes
Taxes that are owed from a prior date
Basis
In tax law, the cost of property as of a certain date, upon which depreciation can be computed and gain or loss can be calculated when the property is sold or exchanged
Capital
Relating of Wealth, Broadly, the total assets of a business
Capital Assets
All assets except those excluded from from that category by Internal Revenue Code
capital gain
When an investor sells a stock, bond or mutual fund at a higher price than he or she paid for it.
Capital Gains Tax
Income tax upon financial gain resulting from the sale or exchange of capital assets
Death Taxes
Another term for inheritance taxes or estate taxes
Declaration of Estimated Tax
A formal estimate of inheritance anticipated during the forthcoming tax year, required under federal and state tax codes from corporations, trusts, and estates, and individuals who receive income that is not subject to withholding
Deductible
Expenses that a taxpayer is permitted to subtract, in whole or in part, in computing taxable income
Deduction
The amount allowed a taxpayer in reduction of gross income from the purpose of determining adjusted gross income
Deferred
Put off to a future time; postponed
Deferred Income
A tax law term from payments received before they are earned
Dependent
a person one supports financially
Depreciation
The leasing in worth of any property caused by wear, use, time, or obsolescence
direct tax
tax leveyed directly on a person ( income tax and social security tax)
Earn
Receives as a result of labor or services
Earned
Received as a result of labor or services. Gained; acquired
Earned Income
Income received for work or for the performance of some service. Unearned income includes dividends, interests, etc
Earned Income Credit
A tax credit on earned income for lower workers with dependent children, as defined by Internal Revenue Code
Equalization of Taxes
Carried out by boards of equalization; the process of adjusting the total assessments on all real estate in tax to equalize them with the total assessments in other tax districts in the state, the …
Estate Tax
A tax imposed by the federal government and most states upon the transmission of property by a deceased person
Exemption
An allowance granted by way of a deduction when computing one's taxable income
Extension of Time
Modification of an obligation by giving additional time for performance. An enlargement of time
Federal Insurance Contributions Act
The federal statute that funds Social Security and Medicare by taxing employers, the wages of employees, and the earnings of the self-employed
FICA
federal insurance contributions act allows social security tax to be taken or deducted from gross income
Fiscal Year
any 12 month accounting period that ends on last day of any month except September
Gain
Earnings; profits; proceeds or excess of revenue over expense
Gift tax
a tax paid by the giver on gifts with values above a federal threshold
Gross
Without deduction; as a whole; entire; total
Gross Estate
The value of all property left by a decedent, before payment of taxes and expenses
gross income
income earned from all sources in 1 yr
Head of Household
Unmarried on last day of tax year and must be principal place of abode for the entire taxable year.
Income
The gain derived from capital or from labor, including profit gained through a sale or conversion of capital assets
Income tax
a tax paid on earnings from wages, interest dividends, and other sources
Income Tax Return
See Tax return
Individual Retirement Account
Under the IRC, individuals who are not included in an employer maintained retirement plan may deposit money in account for the purchase of retirement annuities
Inheritance Tax
A tax on the privilege of taking the property of a decedent by descent or under a will, but not as a tax on the decedent's right to dispose of his property or a tax on the property itself
IRC (Internal Revenue Code)
A compilation of all federal statutes that imposed taxes or provided the administration of such laws
IRS
Abbreviation for Internal Revenue Service
IRS (Internal Revenue Service)
Popularly known as the IRS, the organization that administers and enforces the Internal Revenue Code. The IRS is an agency within the Department of Treasury
Joint Return
A single income tax return filed by a husband and wife reporting their combined incomes
Marital Deductions
In computing the taxable estate, a deduction allowed under both the federal estate tax and gift tax with respect to property passing from one spouse to the other
net income
paycheck term also called take home pay- gross income- taxes, FICA and any other deductions
Penalty
An additional charge because of delinquency in making payment.
Return
A formal accounting of a person's income
Roth IRA
A type of retirement account permitted under the tax laws that allows a tax reduction
Straight-Line Depreciation
A method of depreciating an asset at an even pace by subtracting its estimated salvage value from its cost and dividing the remainder by the number of years of its estimated useful life
Tax
An involuntary charge imposed by the government. (levy, assessment, tribute, impost
Tax Aduit
An examination by the IRS of taxpayer's book and records determine the accuracy of the income tax return
Tax Bracket
A taxpayer's tax rate category "Tax Bracket" is synonymous with tax rate, and is based upon the amount of the taxpayer's taxable income
Tax Credit
A credit that reduces the amount of income tax owed by a taxpayer, as opposed to a deduction, which merely reduces a taxpayer's taxable income
Tax Evasion
Willfully avoiding payments if taxes legally due
Tax Exemption
Freedom from the obligation to pay taxes
Tax return
a set of forms that taxpayers use to calculate their tax obligation
Taxable
Subject to tax;to taxation
taxable income
amount of income on which actually owe a tax
Taxation
The act or process of levying assessing, and collecting taxes;the act of taxing
Taxing
The act or process of levying assessing, and collecting taxes;taeation
Taxpayer
A person who is under a legal obligation to pay a tax; a person who has paid a tax
W-2 Wage and tax Statement
A form issued to a taxpayer annually showing earnings summary as well as withholding taxes
W-4 Form
employees withholding allowance certificate, form completed by employee before they can start work that says how much federal income tax to withhold
Withholding Tax
Federal and state income tax and FICA contributions deducted by an employer from the pay of employees and remitted by the employer to the IRS