Accounting & Tax Definitions -- V

Vacation Home: The tax Code places restrictions upon taxpayers who rent their residences or vacation homes to others for part of the tax year. The restrictions may result in scaling down of expense deductions for such taxpayers.

Valuation Day: Date established by law as the basis of one method of valuation for the calculation of capital gains or losses for income tax purposes.

Variance: Difference between standard cost and actual cost. Also, the difference between an actual revenue or expense item and the budget for that item (budget variance).

Vested Benefits: Pension benefits owned by the taxpayer.

Vertical Equity: Vertical equity states that people in different income groups should pay different rates of taxes. Our current tax system is one of vertical equity.

Voluntary Compliance: This system relies on citizens to report their income, calculate tax liability and file tax returns on time.

Volunteer Income Tax Assistance: Available in most communities are Volunteer Income Tax Assistance (VITA) sites to help with tax return preparation. People volunteer their time to help their neighbors. The service is free to those with limited or moderate income people, non-English speaking, the elderly and the disabled. Some VITA sites even offer free electronic filing. If you want to know more about a VITA site in your community or volunteering your time, call the IRS at 1 800-829-1040.