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22 Cards in this Set
- Front
- Back
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Individual taxpayers must file on or before the.....?
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April 15th.
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With either extension, the due date for the payment of taxes is.....
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April 15th.
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The six month extension must be requested by the taxpayer by filing....
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Form 4868 by April 15th.
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Active Income
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Income from wages, tips, salaries, commissions, and trade or business in which the taxpayer materially participates.
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Accrual Accounting Method
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The form of business accounting in which income is reported in the year earned, and expenses are reported in the year incurred, rather than reporting income and expensed when received or paid, respectively. A business that maintains an inventory is required to use the accrual method for purchases and sales.
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Active Participation
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A term the IRS uses to determine if an investor in rental real estate takes an active role in its management. The rules for active participation are much easier to meet than the material participation rules. An active participant may generally deduct up to $25K of rental real estate losses against other income. An active participant must not be a limited partner or own 10 percent or less of the property.
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Actual Authority
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The authority an agent reasonably believes he possesses because of the principal's communications to the agent. Actual authority may be express or implied.
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Actual Cash Value at Time of Loss
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In insurance, the insured's recovery is limited to the actual cash value of the property at time of loss considering such factors as the fair market value and the cost of repair or replacement less depreciation.
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Ad Valorem Tax
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Tax imposed on the value of property, for example, real estate taxes.
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Adjusted Basis
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The amount used to determine profit or loss from a property sale or exchange. The adjusted basis equals an asset's original cost, plus the cost of improvements to the asset, and minus any deductions, such as depreciation and depletion. Maintenance expenses do not affect the adjusted basis.
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AGI aka Adjusted Gross Income
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A taxpayer's income after certain allowable adjustments from total income, such as IRA contributions, alimony paid, moving expenses, and Keogh account contributions.
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Adoption Credit
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A tax credit for qualifying expenses of adopting a child under age 18 or adopting a person who is physically and mentally unable to care for himself or herself. Medical expenses are not qualifying expenses.
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Accountant Client Privilege
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A rule of evidence protecting confidential information exchanged between an accountant and her client. The rule is not followed in federal law or in many states.
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Account
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An account is any right to payment for goods, services real property, or use of a credit card, not evidenced by an instrument or chattel paper.
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Accord and Satisfaction
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An accord and satisfaction is an agreement to substitute one contractual obligation for another. The accord is the actual agreement to substitute a new performance for the old contractual duty. The satisfaction occurs when the accord is complete (ie when the new performance has been completed). The old contractual duties are not discharged until the accord is satisfied. See also Substituted Contract.
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Accommodation Party
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An accommodation party is one who signs a negotiable instrument for the purpose of lending her name and credit to another party. In essense, an accommodation party is a surety.
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Acceptor
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A drawee that has accepted a draft for payment.
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Acceptance (of commercial paper)
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A drawee's signed agreeement to honor a draft as presented.
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Acceptance (of an offer)
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The acceptance is the offeree's assent to enter into a contract. Acceptances must be unequivocal.
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Acceleration Clause
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A clause in a negotiable instrument that speeds up or accelerates the time of payment upon the happening of a stated event or at the option of the maker or holder.
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Accelerated Deprectiation
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A depreciation method (ie MACRS) that allows a greater portion of the property of the property cost to be deducted in the first years after purchase, rather than spreading the cost evenly over the life of the asset, as with the straight line depreciation method.
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401K
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A deferred compensation plan set up by an employer. A portion of a participating employee's earnings is deducted and placed in a qualified retirement plan. The employer may also contribute a matching percentage. Money in the plan is not taxed until the employee receives distributions, usually at retirement.
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