In general, amounts on a tax return that are deductible from gross income before arriving at Adjusted Gross Income (AGI), such as IRA contributions, half of the self-employment tax, self-employed health insurance deduction, Keogh retirement plan and self-employed SEP deduction, penalty on early withdrawal of savings, and alimony paid.
An automatic extension provides taxpayers with additional time to file their tax return by submitting IRS Form 4868 or Form 7004 by the original due date. However, the estimated tax payment remains due on the original filing date.
Charitable contributions are donations made to qualified organizations that can be claimed as a deduction on your tax return. These contributions can provide both societal benefits and potential tax savings for individuals and businesses.
Constructive Receipt of Income is a doctrine where a taxpayer must include in gross income amounts that, though not actually received, are deemed received during the taxable year. This principle ensures that taxpayers cannot defer taxation by simply delaying the physical receipt of income.
In a tax return, applies to an expense that may be subtracted from income, and in insurance, signifies the initial amount the insured must pay before insurance reimbursement is made for a claim.
A deficiency in tax occurs when a taxpayer's correct tax liability exceeds the taxes previously paid for that taxable year. It can be identified during an audit of the taxpayer's return and may lead to penalties.
A delinquent return is a tax return that is not filed within the time prescribed by the Internal Revenue Code (due date). It may be subject to penalties based on the unpaid tax liability.
A unique number stamped on tax returns, checks, or other documents that enables the IRS to quickly identify and access specific documents.
A formal claim made by a taxpayer due to an overpayment of tax, often resulting from an error or mistake in a tax return or statement. Must be filed within six years.
The Failure-to-File Penalty is assessed on tax returns not filed by the due date, and it is typically a percentage of the tax that remains unpaid. This penalty aims to deter late filings and encourage timely compliance.
Marital status refers to the legal standing of an individual's relationship in the eyes of the law, which directly impacts the kind of tax return they file. This can be single, joint, married filing separately, or head of household. Different tax rates and benefits apply to these various statuses.
An S Corporation is a type of corporation that meets specific Internal Revenue Service (IRS) requirements allowing the company's income, losses, deductions, and credits to be passed through to shareholders for federal tax purposes.
A system that enables taxpayers to assess their own income tax and capital gains tax liabilities for the year. Since 1996-97, self-assessment has become a significant component of the UK tax return system, encapsulating details on taxable income, chargeable gains, and claims for personal allowances.
The Support Test is one of the five criteria used to determine whether an individual can be claimed as a dependent on a taxpayer's tax return.
A tax accountant is a professional specializing in preparing, filing, and managing tax returns for individuals and businesses, ensuring compliance with tax laws and maximizing tax efficiency.
A tax return is an annual statement of income and personal circumstances filed by a taxpayer to calculate and report individual tax liabilities and claim personal allowances.
The W-2 Form is a tax form that each employer sends annually to each employee and to the IRS. It includes details of the employee's gross earnings and deductions for federal, state, and local income taxes as well as FICA. Employees are required to attach a copy to their tax returns.
