Taxation Financial Terms & Definitions

29 terms in this topic

Taxation encompasses all laws, regulations, and processes governing the assessment and collection of taxes. It includes various tax types such as income, corporate, sales, and property taxes, as well as rules on tax rates, deductions, credits, and compliance.

Itemized deduction An itemized deduction is a specific expense that you can subtract from your Adjusted Gross Income (AGI) to… Long-term capital gains Long-term capital gains are the profits you earn from selling an asset that you have held for more… Marginal tax rate The marginal tax rate is the percentage of tax applied to your last dollar of income. In a… Modified adjusted gross income (MAGI) Modified Adjusted Gross Income (MAGI) is a critical calculation used by the Internal Revenue Service (IRS) to determine… Nonrefundable tax credit A nonrefundable tax credit is a type of tax credit that can reduce your tax liability to zero,… Ordinary dividend An ordinary dividend is a type of payment that a corporation makes to its shareholders from its profits,… Qualified dividend A qualified dividend is a type of dividend payment that meets specific criteria set by the Internal Revenue… Refundable tax credit A refundable tax credit is a type of tax credit that can reduce your tax liability below zero,… Short-term capital gains Short-term capital gains are profits earned from selling an asset that was held for one year or less.… Standard deduction The standard deduction is a specific dollar amount that reduces the income on which you are taxed. It… Step-up in basis A step-up in basis is a tax rule that adjusts the cost basis of an inherited asset —… Tax bracket A tax bracket is a range of income subject to a specific tax rate in a progressive tax…