Head of Household

This is a special filing status for unmarried individuals, and, in certain special situations, married taxpayers, who pay more than half the cost of maintaining a home for themselves and a qualifying person, for more than half the tax year. The special filing status affords qualifying taxpayers with a higher standard deduction and more beneficial
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UNDERSTANDING THE LANGUAGE OF TAXES

June 2, 2008 rick
Part of our increasingly complicated Federal income tax structure is a myriad of acronyms and abbreviations. Understanding the meaning of the more frequently encountered terminology can lead to a better comprehension of the complex tax situations that a taxpayer might encounter. This section explains some common terminology and provides an overview of their application.
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UNDERSTANDING THE LANGUAGE OF TAXES

Part of our increasingly complicated Federal income tax structure is a myriad of acronyms and abbreviations. Understanding the meaning of the more frequently encountered terminology can lead to a better comprehension of the complex tax situations that a taxpayer might encounter. This section explains some common terminology and provides an overview of their application.
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Basis

April 17, 2008 rick
Basis is the dollar value from which a taxpayer measures any gain or loss from an asset for income tax purposes. Generally, your basis begins with what you paid for the asset, including purchase costs (cost basis) and then is adjusted up for improvement and sales costs and down for any depreciation or casualty losses
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Tax Identification (ID) Number

April 17, 2008 rick
For most individuals, their tax identification number is their Social Security number (SSN). It is used when filing tax returns and must be given to financial institutions, employers and other income payers so that appropriate information reporting forms can be completed. Failing to do so can result in a penalty or mandatory back-up withholding. A
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Recapture

April 17, 2008 rick
Is to include as income or as additional tax in the return an amount allowed or allowable as a deduction or a credit in a prior year. In some cases, the tax law requires that a tax benefit taken in an earlier year be paid back if the property on which the benefit was claimed
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Limited Partner

Is a partner whose participation in partnership activities is restricted, and whose personal liability for partnership debts is limited to the amount of money or other property that he or she contributed or may have to contribute.
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Unearned Income

Is income not earned from personal services. Examples are income from investments, pensions, capital gains and passive activities.
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Gift Tax

Many taxpayers believe they can deduct gifts they give to others. That is not true! To prevent people from giving their assets away prior to their death and thereby avoid taxes on their estate, our tax system includes a gift tax, which is paid by the giver and must be reported on a gift tax
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Taxable Income

This can mean income that is taxable as opposed to income that is not, such as tax-exempt interest from municipal bonds. Or, it can refer to taxable income on a tax return, which is income less adjustments, deductions and exemptions (the final income upon which tax is computed).
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