10/19/2017

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Tax Definitions

Tax Definitions
Tax Definitions A
Tax Definitions B
Tax Definitions C
Tax Definitions D
Tax Definitions E
Tax Definitions F
Tax Definitions G,H
Tax Definitions I
Tax Definitions J,K,L
Tax Definitions M
Tax Definitions N,O
Tax Definitions P,Q
Tax Definitions R
Tax Definitions S
Tax Definitions T
Tax Definitions U,V,W

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Tax Definition and Terms (P, Q)

Partnership: An unincorporated business entity that is organized by two or more individuals that is not, in itself, taxable. The tax consequenses lie with the individuals to whom the net profits are distributed on an annual basis.

Passive Activity: A business venture in which a silent partner who is not actively involved with the day to day management is limited by IRS rules on the deduction of losses from passive activities to income from other passive activities.

Patronage Dividend: A taxable distribution that is made to patrons or members of a cooperative.

Payroll Withholdings: The taking or withholding of taxes from an employee's paycheck that is handled by the employer for distribution to the Internal Revenue Service.

Percentage Depletion: A deduction method that applies a fixed percentage to the gross income generated by mineral producing property.

Personal Exemption: A deductible allowance on tax returns for the filer and his or her dependents.

Personal Interest: The interest that is incurred on personal or consumer debt, such as auto loans and credit cards, that is not tax deductible.

Points: A charge to a homeowner on a new loan. Points can also be charged to a seller of real property if the buyer is getting a specific type of loan, FHA or VA, and depending on the type of loan, points may be deducted in the year of the origination or amortized over the life of the loan.

P&I (Principal And Interest): Payments made that includes the principal amount due and the interest charges that are applied. Does not include taxes and insurance.

PITI: Refers to the monthly payment on a mortgage that includes the principal, interest, tax, and insurance combined into one payment.

Principal Place of Residence: The place of residence that most of your time is spent.

Profit-sharing Plan: An employer based retirement plan in which annual contributions may vary from year to year as a percentage of the employer's profits or the employee's salary.

Qualified Charitable Organizations: Organizations that are nonprofit and approved by the United States Treasury Department to receive charitable contributions.

Qualified Plan: A plan that is government approved that allows for the tax deferred compounding of monies that are inputed until the time of withdrawal. These plans are usually stocks, bonds, profit sharing, or may be IRAs or Keoghs.

Qualified Widow or Widower: A special tax filing status that allows widows or widowers with dependent children to use the same tax rates that apply to joint filers up to two years following the death of a spouse.

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