In tax and accounting terms, “income statement” refers to an accounting of a business’s revenue and expenses for a period of time. This is also often referred to as a “profit and loss” statement (“P and L” for short).
In tax terminology, a pass-through entity is a business where the end results of operations “pass through” to the owners and are reported on the owners’ personal tax returns.
A balance sheet is a summary of a business’s assets, liabilities and equity.
Form 8332 is a tax form signed by a custodial parent to release their claim to a dependency exemption for a child and give it to the non-custodial parent.
The term “529 Plan” is a generic name given to tax-advantaged savings accounts for college expenses.
In the accounting world, the term “compilation” refers to formal financial statements prepared by a public accountant.
The term Social Security Wage Base refers to the maximum amount of wages or self-employment income on which the 6.2% Social Security tax is based.
In tax terminology, the term “draw” refers to money taken out of a sole proprietorship by the proprietor, or out of a partnership by a partner.
The tax term “Section 179” refers to a deduction, similar to depreciation, that allows businesses to deduct 100% of the cost of certain asset purchases. Mechanics Since this post is intended to just be a basic overview, I’ll avoid getting into technicalities. But here are the basics:: A Section 179 deduction can be taken on […]
In accounting terminology, a “review” is a type of report issued by a CPA regarding a company’s financial statements. A review is one step below an audit. In a review, the CPA examines a company’s financials to verify that they are free of deficiencies, but the firm does not review internal controls or fraud risks as in […]