In the USA, the difference between the gross income of a taxpayer and the adjustments to income, which is an essential figure for multiple tax computations.
An amended tax return is a form filed as a correction, supplement, or replacement for an original tax return. For instance, individuals use Form 1040X, and corporations use Form 1120X, to claim refunds or rectify errors in prior year tax returns.
This is a filed statement that a taxpayer must submit to the IRS that includes an estimate of the amount of income tax owed for a particular year. It is typically used by individuals who do not have their taxes automatically withheld from their paycheck.
A Dependency Exemption allows taxpayers to deduct a specified amount for each dependent claimed on their tax return, reducing their overall taxable income. It is designed to assist families by acknowledging the financial responsibility involved in supporting dependents.
An Electronic Return Originator (ERO) is a tax professional or entity authorized by the IRS to prepare and file tax returns electronically on behalf of taxpayers.
An Electronic Return Originator (ERO) is an individual or company authorized by the IRS to submit tax returns electronically.
The Electronic Transmitter Identification Number (ETIN) is a unique identifier assigned by the IRS to authorized electronic return originators (EROs) transmitting e-filed tax returns.
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.
An extension refers to an agreement between two parties to extend the time period specified in a contract. In the context of taxation, an extension provides an additional period of time to file an income tax return.
An additional period during which a tax return may be filed without penalty. An automatic six-month extension of time to file an individual tax return (Form 1040) is obtained by filing Form 4868 by April 15.
U.S. corporate income tax return, generally required to be filed by March 15 of each year.
A Head of Household tax filing status applies to unmarried taxpayers who maintain a home as the principal residence for a designated dependent. This status offers a lower tax rate than Single filers and provides significant tax benefits.
A tax return filed jointly by a married couple, computing a combined tax liability with progressive tax rates based on the assumed equal income by both spouses.
Penalties for repeated errors are imposed to discourage consistent inaccuracies in tax filings or financial reports. These penalties serve as a deterrent for habitual mistakes and ensure compliance with legal standards.
The term 'single taxpayer' refers to an individual who is not married on the last day of the tax year. This designation affects the rate schedules and tax tables used to calculate their tax liabilities.
A surviving spouse refers to a widow or widower who outlives their partner. In tax terms, a surviving spouse may file a joint return with the deceased spouse in the year of death and use joint return tax rates for two years following the spouse's death if certain conditions are met.
A tax refund is the reimbursement issued by the government to a taxpayer when they have overpaid their taxes throughout the year. This typically occurs due to over-withholding, overestimating income, or underestimating deductions, exemptions, and credits.
A professional who is compensated for preparing, assisting in preparing, or reviewing tax returns. They must sign the tax returns they handle.
A Taxpayer Identification Number (TIN) is a unique identifier used by the Internal Revenue Service (IRS) in the United States to track and manage taxpayers' various tax-related activities.
The Year of Assessment (YA) is the calendar year in which income for the preceding year, referred to as the 'basis year,' is assessed for tax purposes. It is a crucial concept in understanding the tax cycle and filing deadlines.
