Written by Wash Sale: The sale of stocks, bonds or mutual fund shares for a loss when, within 30 days before or after that sale, you buy the same or substantially identical securities. The law forbids the deduction of the loss, but the denied loss is added to the cost basis of the new shares which will [...]
READ MORE »Posts in category Tax Terms
Tax Glossary: Vested Benefits
Vested Benefits: Benefits in a company retirement plan that are yours to keep if you leave the job. Your own contributions, to a 401(k), say, are immediately 100% vested. But employer contributions on your behalf can be vested gradually over a period of time, as a way to encourage you to stay with the employer. [...]
READ MORE »Tax Glossary: Unearned Income
Unearned Income: Income from investments, such as interest, dividends and capital gains is considered “unearned” income.
READ MORE »Tax Glossary: Earned Income
Earned Income: Compensation, such as salary, commissions and tips, you receive for your personal services. This is distinguished from “unearned” income such as interest, dividends and capital gains.
READ MORE »That’s Deductible?!
It’s that time of year. And if you’re filing your tax return on your own, we know your process: Step 1. Enter all income. Step 2. Enter all known expenses and deductions. Step 3. Wait hours (maybe even days) before filing to brainstorm: What else can I possibly deduct?? As tax professionals, we’ve heard some [...]
READ MORE »Tax Glossary: Lump-sum Distribution
Lump-sum Distribution: The payment within one year of the full amount of your interest in a pension or profit-sharing plan. To qualify as a lump-sum distribution — and for favorable tax treatment — other requirements must be met.
READ MORE »Tax Glossary: Charitable Carryovers
Charitable Carryovers: Generally, your deduction for donations to charity in one year cannot exceed 50% of your adjusted gross income for that year (30% in the case of donations of appreciated assets and contributions to private foundations). You can carry over any excess for the following five tax years. The carryover expires, however, should you [...]
READ MORE »Tax Glossary: Mortgage Interest
Mortgage Interest: A term often used to refer to deductible interest paid on debt that qualifies as acquisition indebtedness or home-equity debt. Interest on up to $1 million of debt used to buy or build your principal residence or second home can be deducted; in addition, interest on up to $100,000 borrowing via a home-equity [...]
READ MORE »Understanding and Planning for the New Health Care Surtax
On January 1, 2013, the 3.8% Medicare surtax, passed by Congress in 2010 to help pay for healthcare reform, goes into effect. In order to help taxpayers plan for the surtax, we have summarized what type of income the tax applies to and how it is calculated. We have also listed a few ideas on [...]
READ MORE »Tax Glossary: Capital Expenditure
Capital Expenditure: The cost of a permanent improvement to property. Such expenses, such as adding central air conditioning or an addition to your home, increase the property’s adjusted tax basis.
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