Thursday 09 September, 2010
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Useful Tax Glossary and Definitions

As a courtesy to our clients, we have compiled a comprehensive list of common tax terms and definitions for quick reference.

Tax Lingo Troubles?

Accrual method of accounting

A business method of accounting requiring income to be reported when earned and expenses to be deducted when incurred. However, deductions generally may not be claimed until economic performance has occurred.
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K

Term Definition
Keogh plan

Retirement plan set up by a self-employed person, providing tax-deductible contributions, tax-free income accumulations until withdrawal, and favorable averaging for qualifying lump-sum distributions.

Kiddie tax

The tax on the investment income in excess of $950 of a child under age 18, based on the parents' marginal tax rate and computed on Form 8615.