| Term |
Definition |
| Tangible Personal
Property |
Property, other than
real property, that has a physical existence and
an intrinsic value. Examples are livestock,
machinery, equipment, and vehicles. |
| Taxable Income |
Adjusted gross income
less itemized deductions or the standard
deduction, less allowable personal and dependent
exemption amounts. |
| Taxable U.S. Domestic
Corporation |
An organization
incorporated in and doing business with the
intent to make a profit in the United States.
Examples are H&R Block, General Motors, and
IBM. |
| Taxable Year |
The calendar year or
fiscal year for which the taxable income is
computed. |
| Tax Benefit Rule |
A rule that limits the
recognition of income from the recovery of an
expense or loss properly deducted in a prior tax
year to the amount of the deduction that reduced
taxable income. |
| Tax Bracket |
The rate at which income
at a particular level is taxed. |
| Tax Court |
The U.S. Tax Court is
one of three trial courts of original
jurisdiction that decide litigation involving
federal income, death, and gift taxes. |
| Tax Credit for the
Elderly or the Disabled |
Eligible taxpayers 65
years old and older, and those under 65 retired
on a permanent and total disability, may claim
the credit. The amount of the credit, if any, is
computed on Schedule R, Form 1040, or Schedule 3,
Form 1040A. |
| Tax-Exempt Income |
Income that by law is
not subject to income tax. |
| Tax-Free Exchanges |
Transfers of property
specifically exempt from federal income tax
consequences in the current year. Examples are a
transfer of property to a controlled corporation
and a like-kind exchange. |
| Tax Home |
The business location,
post, or station of the taxpayer. If an employee
is temporarily reassigned to a new post for a
period of one year or less, the taxpayer's tax
home is his personal residence and the travel
expenses are deductible. |
| Tax Liability |
The amount of total tax
due the IRS after any credits and before taking
into account any advance payments (withholding,
estimated payments, etc.) made by the taxpayer. |
| Taxpayer's Child |
Includes the taxpayer's
natural child, stepchild, or a child placed for
legal adoption regardless of when the child came
to live with the taxpayer; also, any other child
whom the taxpayer cared for as his own child for
the entire year unless the child's natural or
adoptive parents provided over half of the
child's support. |
| Tax Preference Items |
Tax items that may
result in the imposition of the alternative
minimum tax. |
| Tax Rate Schedules |
Tax rate schedules are
used by certain taxpayers. Separate rate
schedules are provided for married individuals
filing jointly or qualifying widow(er)s,
unmarried heads of household, single taxpayers,
and married individuals filing separate returns. |
| Tax Table |
The Tax Table is
provided for taxpayers with taxable incomes of
less than $100,000. Separate columns are provided
for single taxpayers, married taxpayers filing
jointly or qualifying widow(er)s, heads of
household, and married taxpayers filing
separately. |
| Temporary Assignment |
A work assignment away
from the taxpayer's tax home, the termination of
which can be foreseen at the time the job begins,
within a reasonably short period. Deduction of
temporary assignment expenses is allowed to
provide relief to those who have extra expenses
because of their work. To have any deductible
expenses, the taxpayer must own or be renting or
buying lodging in the general area of the regular
place of employment and intend to return to that
lodging at the end of the temporary assignment. |
| Tenancy by the
Entirety |
A tenancy in which
parties jointly own property. After the death of
one, the survivor takes the whole estate. Tenancy
by the entirety can be terminated during their
lifetime only by joint action of the parties. |
| Tenancy in Common |
Two or more individuals
jointly owning property. Each owns an undivided
share of the whole. The shares remain separate
even if one party dies. |
| Threat of
Condemnation |
When a property owner is
informed, either orally or in writing, by a
representative of a governmental body or by a
public official authorized to acquire property
for public use, that a decision has been made to
acquire his property, and it is reasonable to
believe that the property will be taken, a threat
of condemnation exists. |
| Tip Income |
Gratuities received by
the taxpayer for services rendered. Tips of $20
or more from any one job during a calendar month
must be reported to the taxpayer's employer. |
| Trade Date |
Date on which a capital
asset is actually bought or sold. |
| Trade-In Allowance |
The amount by which the
seller reduces the sale price of a property in
return for the property of the buyer. This does
not affect the buyer's basis in the property
purchased. |
| Trade or Business
Expenses |
Deductions from gross
income that are attributable to a taxpayer's
business or profession. |
| Traditional IRA |
An individual retirement
arrangement, contributions to which may or may
not be deductible depending on the taxpayer's AGI
and whether he or she is covered under an
employer-sponsored retirement plan. Earnings
within a traditional IRA grow tax-deferred.
Distributions from a traditional IRA are taxable
except to the extent they represent nondeductible
contributions. |
| Transfer Tax |
A tax imposed when real
estate is sold or transferred from one person to
another. |
| Transportation
Expenses |
Transportation expenses
for an employee or self-employed taxpayer include
only the cost of transportation (taxi fares, auto
expenses, etc.) incurred in the course of
business or employment when the taxpayer is not
away from home in a travel status. |
| Travel Expenses |
Travel expenses include
meals and lodging and transportation expenses
while away from home in the pursuit of a trade or
business (including that of an employee). |
| Trust |
A tax entity created by
a trust agreement. This entity distributes all or
part of its income to beneficiaries as instructed
by the trust agreement. This entity is required
to pay taxes on undistributed income. |
