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A stock option that may be granted to an employee under tax-favored terms.

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A portion of a future payment that is treated as interest if parties to the transaction do not provide a stated amount of interest at a rate acceptable to the IRS. (See “Applicable Federal Rates (AFRs).”) This prevents improper use of certain tax advantages (capital gains rates or tax deferral). For example: if a business […]

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A filing status available to qualifying single parents (or others supporting certain dependents) that allows lower taxes than the normal rates for singles.

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All income that might be subject to tax. Most “realized” increases in wealth are considered income. The main exceptions for individuals are gifts, inheritances, increases in value of property prior to sale, loan repayments and some personal injury awards. For businesses, investments in their capital are not considered income.

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Bonuses payable to key executives in the event control of their corporation changes, as in the case of a takeover. “Excess” golden parachute payments are subject to tax penalties.

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An extra tax on gifts or on-death transfers of money or property that would otherwise escape the once-per-generation transfer taxes that apply to gifts and estates. For example: a gift from a grandfather to a granddaughter skips a generation and might be subject to this tax.

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A rule that applies to the sale of part of a group of similar items (such as inventory, shares of the same stock, etc.) that assumes the first ones acquired were the first ones sold. This is important if the items in the group were acquired or manufactured at different times or for different costs. […]

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One of four tax ranks determined by your marital status, your dependents and the way you file your tax return: (1) single, (2) married filing jointly, (3) married filing separately and (4) head of household. Filing status determines your tax rates and your eligibility for various tax benefits (for example: alimony deduction, IRA deduction, standard […]

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Social security taxes (for both old-age, survivors and disability insurance—OASDI—and Medicare).

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Quarterly down payments on a year’s taxes that are required (on April 15, June 15, September 15, and January 15) if the total year’s taxes will exceed $1,000 and the amount is not covered by withholding.

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