A
- Allowable Deductions - Deductions or expenditures allowed by IRS to be subtracted from gross income to reduce the taxable income for income tax are called allowable deduction.
- Adoption Tax Credit - Adopting a is not an easy job. It is often a difficult and expensive process. This credit is a boon for parents planning to adopt a child. It helps decrease the financial burden of adopting a child. Adoption Tax Credit is nonrefundable in nature. Thus, it can't give you a tax refund, but only can deduct from existing tax liability.
- AGI - Adjusted Gross Income - Adjusted Gross Income is an individual's total gross income after the deduction of allowable expenses.
- Alternative Minimum Tax - Alternative Minimum Tax or AMT is a provision in Internal Revenue Code (IRC) which imposes a supplemental income tax. This tax is apart from standard income tax for those earning high-income and paying low taxes by taking exemptions and deductions.
B
- Bonus Depreciation - Bonus depreciation is a provision that allows taxpayers to deduct a specified percentage of depreciation on the qualifying property in the year it is placed in service. This depreciation can be 30%, 50%, or 100% according to the life and eligibility of the equipment.
C
- Charitable Donations Deductions - Contributions made to qualified charitable organizations in the form of cash, property or services can be claimed as deductions on your federal income tax return. Such deductions are called Charitable Donations Deductions. Contributions made to an individual are not deductible as charitable donations deductions.
- Child Tax Credit - Child Tax Credit is a provision of US Federal Income Tax Law, where parents having dependent children under the age of 17 can claim a tax credit up to $1000 per qualifying child. Like other tax credits, the Child Tax Credit is a type of credit which reduces your tax liability and help the parent or guardians to easily raise their dependent children.
E
- Earned Income Credit - Earned Income Credit (EIC also known as Earned Income Tax Credit (EITC) is a refundable tax credit available to families living in the United States and having lower income. Refundable tax Credit means that you can get a refund of balance amount if the tax you owe is less.
- Education Savings Account - An Education Savings Account a tax tax-advantaged account allowing the distributions to be solely used for paying qualified education expenses for the designated beneficiary. It is also known as Coverdell Education Savings Account. It was named after the late Senator Paul Coverdell.
F
- FICA - FICA is the abbreviation of Federal Insurance Contribution Act. Federal Insurance Contribution Act is a tax provision of IRC that mandates the employer to withhold the employee's contribution to Social Security and Medicare taxes from their paycheck and pay it along with employer's contribution to IRS.
H
- Home Office Deduction - Home Office Deduction is a provision of Internal Revenue Code (IRC), which allows those taxpayers who use their home or a part of their property for business use to claim a deduction in their income tax return.
I
- Itemized Deductions - Itemized Deductions are a type of Allowable deductions in the federal income tax, in which actual expenses are considered instead of Standard Deduction.
- IRA - An IRA (individual retirement account or individual retirement arrangement) is a tax-favored savings account designed to help individuals save and grow funds for their retirement.
J
- Job Hunting Expenses - Expenses related search of a new job in the same line as travel in search of the job, printing and mailing resumes etc are called Job Hunting Expenses. IRS allows taxpayers to deduct Job Hunting Expenses on their federal tax return who are looking for a new job in the same line of work.
M
- Medical Savings Account - MSA stands for Medical Savings Account. Medical saving Account is a type of savings account in which tax-deferred deposits can be made and used only for medical expenses.
- MACRS - MACRS is the abbreviation of Modified Accelerated Cost Recovery System. Modified Accelerated Cost Recovery System is a tax depreciation system in the United States. Modified Accelerated Cost Recovery System allows accelerated depreciation over longer time periods for the qualifying assets. MACRS was introduced in 1986.
- MAGI - Modified Adjusted Gross Income - t is calculated by taking your AGI (Adjusted Gross Income) and adding back several deductions. These deductions can be student loan deductions, Deductions of IRA contributions, foreign income, deductions of foreign-housing, adoption expenses and deductions for higher-education costs.
P
- Pease Limitation - Pease Limitation on Itemized Deduction is a provision of Internal Revenue Code that reduces non-exempt itemized deductions for taxpayers with high AGI.
S
- SECA - SECA stands for Self-Employed Contribution Act. SECA is a law which mandates the self-employed small business owners to pay 15.3% Self-Employment Tax on their net income which covers their own Social Security, Medicare, and OASDI expenses.
- Section 179 Deduction - Section 179 deduction is the immediate expense deduction available to business owners on the purchase of business equipment during the tax year instead of depreciating or capitalizing it over the life of the equipment.
- SIMPLE IRA Plan - SIMPLE IRA plan stands for Savings Incentive Match Plan for Employees. SIMPLE IRA plan allows employees and employers to contribute to traditional IRAs set up for employees. It is ideally suited for a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
- Standard Deduction - Under the US Tax Law, a fixed amount allowed by the IRS to be deducted from gross income for the purpose of Income tax is called Standard Deduction.
- Standard Mileage Rate - Standard Mileage Rate is a preset per mile rate set by IRS that a taxpayer can claim as a deduction on his/her tax return for using his/her vehicle for business, charity, medical or moving purposes. For any of the four purposes, you can take standard mileage rate in lieu of actual expenses incurred when calculating deductible automobile expenses.
T
- Tax Exemptions - Tax Exemptions are a form of deduction that IRS allows to every taxpayer in the federal income tax. These tax exemptions reduce your taxable income similar to the allowable deductions. Taxpayer often either don't pay attention to these tax exemptions and tend to pay higher taxes. Knowing these exemptions will help you reduce your tax liability.
- Tax Deducted At Source - TDS stands for Tax Deducted at Source. It is income tax that a payer deducts from the payment of the payee. The payer deposits the tax that is collected to the IT Department. The income tax collected by the payer on behalf of the payee is known as Tax Collected at Source (TCS). Whereas the tax deducted from the payee by the payer is known as Tax Deducted At Source.
W
- Withholding Tax - Withholding Tax is the amount of income taxes deducted from your paycheck by your employer and directly paid to the government on your behalf. Withholding taxes is a way to collect tax at the source of income instead collecting income tax later.
4
- 401k Retirement Plan - A 401k retirement plan is a type retirement plan that can only be sponsored by an employer, in which employees can save and invest a specific portion of their paycheck before taxes.