| 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. |
| Term | Definition |
|---|---|
| Net operating loss (NOL) |
A business loss that exceeds current income may be carried back against income of prior years and carried forward as a deduction from future income until eliminated. |
| Non-Resident |
A non-resident is an individual who temporarily resided and/or worked in a state at any time during the tax year, although that state was NOT their state of residence. |
| Nonperiodic distributions |
A 20% withholding rule applies to nonperiodic distributions, such as lump-sum distributions, paid directly to employees from an employer plan. |
| Nonrecourse financing |
Debt on which a person is not personally liable. In case of nonpayment, the creditor must foreclose on property securing the debt. At-risk rules generally bar losses where there is nonrecourse financing, but an exception applies to certain nonrecourse financing for real estate. |