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Glossary Of Terms

As with all professions, we in the tax and accounting arena have our own jargon.  I have also adopted several other abbreviations and acronyms in order to save time and space when writing and speaking.  If there are other terms that should be included here, please let me know.

 

1031 Exchange = Technique to defer taxation of gains on sales of certain assets (most often real estate) by replacing with similar assets within 180 days.  aka Like Kind Exchange.

Above The Line = Shorthand by tax pros to describe anything (income or expense) that affects the calculation of AGI.  In most cases, a deduction claimed above the line will reduce taxes more than one of the same amount claimed below the line.  

AGI = Adjusted Gross Income = the bottom line on Page 1 of the 1040.  Used by our rulers to decide who is evil rich or not.  Most penalties on success (Means Testing), such as reduced deductions, credits and exemptions are based on AGI.

AMT = Alternative Minimum Tax.  A special tax originally intended to nail evil rich people who used too many tax loopholes.  Currently hitting millions more of middle income individuals each year.

Below the Line = Deductions claimed after AGI, normally on Schedule A and Page 2 of the 1040.  These normally do not save as much in taxes as deductions above the line.

Blog = Abbreviation for Web Log, which is a series of postings on the world wide web. 

DC = Washington, DC = Disconnected Fantasy Land where our rulers reside and decide the fates of us commoners.

Evil Rich = Those people who our rulers have decided are not worthy of certain tax breaks.  Defined by AGI.  Different income levels for each area of the tax code.  For Social Security recipients, a single person with annual income over $25,000 is considered by our rulers to be evil rich and thus required to pay income tax on from 50% to 85% of his/her SS benefits.  This is $32,000 for married couples. 

GIGO = Garbage In, Garbage Out = The results of a project or calculation can only be as good as the information provided.  For example, tax returns can only be as accurate as the data provided to the preparer.

IRC = Internal Revenue Code.  The bible of taxation as crafted by our rulers in Washington, DC

IRS = Internal Revenue Service.  The agency authorized by our rulers in DC to ignore all constitutional protections and use whatever means possible to squeeze as much money out of the people to be used for income redistribution and our rulers' other pet projects.

Left CoastThe states on the West side of theThe Left Coast continental United States (California, Oregon and Washington), which coincidentally are also dominated politically by Socialists.

Marriage Penalty = Various technicalities of the tax code that require married couples to pay several thousand dollars in taxes than they would have to pay if they were single and filing two separate tax returns.  Estimated at $50 billion per year in extra income for our rulers in DC, which is why they always claim they can't afford to eliminate it.  

PRC = People's Republic of California

QB = QuickBooks

Rulers = Elected officials who believe it is their function in life to dictate to the rest of us how we are to perform every single aspect of our business and personal lives, while exempting themselves from those same rules.

Section 179 = Election under the IRC to expense newly acquired business assets in the first year rather than depreciate them over several years.  More details.

SSA = Social Security Administration.  The government agency that keeps all records regarding SS taxes paid in and benefits to be paid out.  Dealing with SSA personnel makes dealing with IRS personnel seem like a walk in the park.  SSA employees set the bar for incompetence.

SWAG = Scientific Wild Ass Guess = Numbers that have a slightly higher chance of being accurate than WAGs due to the use of some basic calculation or mathematical theory.

WAG = Wild Ass Guess = Numbers pulled out of thin air.

WSJ = Wall Street Journal

 

Last Updated: 
Tuesday, January 31, 2012

 

Kerry M. Kerstetter
MBA~CPA~ATP~ATA
11802 Deer Road
Harrison, AR  72601
E-Mail: KMKCPA@TaxGuru.org
Web: www.TaxGuru.org
Main Blog: Blog.TaxGuru.net
QuickBooks Blog: http://taxguruqbtips.blogspot.com