Accounting & Tax Definitions -- T

Tangible Personal Property: Property, other than real property, that has a physical existence and an intrinsic value. Examples are livestock, machinery, equipment, and vehicles.

Tariff Duty: Ever travel abroad and do a little duty-free shopping at the airport? You're buying tax-free products. When you buy that same product at your corner store (assuming it's not a duty-free shop), you're paying a tariff duty or tax on the product.

Tax Avoidance: Legal minimization of the impact of taxation.

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 Credits: The amount of money that tax payers can deduct directly from their 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 Deductions: The amount that a person or business can subtract from their taxable income. The more you can deduct, the less you pay.

Tax Evasion: Illegal attempt to escape the impact of taxes.

Tax Exempt: Income that by law is not subject to income tax.

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.

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 Shelter: Investment to acquire something of value with the expectation it will produce income and reduce or defer taxes.

Tax Shift: When a person or group is able to shift a tax that they're supposed to pay to someone else.

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.

Tax Withholdings: There's a portion that your employer takes from your (and other employees) paycheck to pay part or all of your taxes.

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.

Taxable Income: Everything you earn that can be taxed.

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.

Taxes: Taxes are required payments of money to the government. This money is used to make your life better. You might not even realize it, but tax money provides public goods and services for the community as a whole (think roads, schools, law enforcement, public libraries, etc.).

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.

Telefile: The IRS knows that millions of people like you have simple tax returns, but some of them don't have access to a home computer. However, most people do have access to a touch-tone telephone. Telefile lets you use your tone touch phone, but not a cell phone, to send tax information directly to an IRS computer. It's free, simple, accurate and secure. The IRS will send you the TeleFile package if you are eligible to participate. Check out IRS e-file using Telefile. When you visit, be sure to check out the seven states that offer state TeleFile during the same call!

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.

Title: Legal right to ownership of property.

Trade Date: Date on which a capital asset is actually bought or sold.

Trade or Business Expenses: Deductions from gross income that are attributable to a taxpayer's business or profession.

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.

Traditional IRA: An individual retirement arrangement, contributions to which may or may not be deductible depending on the taxpayer's modified 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.

Transaction Taxes: The sale of all goods and services have transaction taxes. These taxes can be a set percentage of a sales value or a set amount of a physical quantity. What's that all about? Let's say you buy a CD-you pay a set amount in sales tax, but when you fill up your tank with gas, you pay a tax per gallon.

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).

Treasury Bills: Debt obligations of the U.S. Government that mature in one year or less.

Treasury Shares: Shares of stock that were issued and later acquired by the corporation.

Trial Balance: Listing and totaling all balances in a ledger to verify that total debits equal total credits.

Trust: Fiduciary relationship under which property is held by one person (a trustee) for the benefit of another (the beneficiary).

Trust Fund: Money, property or valuables legally held by a person or company for the benefit of another.

Trustee: A person or company legally responsible for the property of another.