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Glossary of Accounting terms: (in English)
IRS: Internal Revenue Service
Form 1040: Form filed by individuals to IRS to report annual income
Form 1040EZ: Short form filed by individuals to IRS to report annual income
Form 1065: Form filed by partnerships to IRS to report annual income
Form 1120: Form filed by corporations to IRS to report annual income
Form 1120-S: Form filed by S-corporations to IRS to report annual income
Deductions: Expenses that reduce adjusted gross income such as self-employed health insurance
Credits: Credits reduce tax dollar for dollar, examples include education credits, dependent care expenses
Taxable Income: Adjusted gross income less itemized or standard deduction and exemptions.
Adjusted Gross Income(AGI): Total income less deductions
Tax Deferred: Revenue that is not taxed in the year it is earned or received
W-2: Form issued to employees, IRS and state by employer to report wages earned
W-4: Form filled out by employee for exemptions
I-9: Form filled out by contractors for purpose of filing 1099’s
1099-Misc: Form sent by a payer to a payee for rents, royalties, other income, nonemployee compensation, crop insurance proceeds, attorney fees, etc.
1099-Int: Form sent by a payer to a payee for interest income
1099-Div: Form sent by a payer to a payee for dividend income
1099-R: Form sent by a payer to a payee for pension, annuity, retirement or profit sharing plan, or IRA distributions
Itemized Deductions: Includes medical expenses paid, taxes paid, mortgage interest paid, charitable contributions, casualty losses and unreimbursed job expenses. This is used when the total of these items is greater than the standard deduction.
Standard Deduction: A set dollar amount that reduces the amount of income on which you are taxed. This amount is dependent on your filing status.
Filing Status: Includes Single, Married filing jointly, Married filing separately, Head of household, and Qualifying widow(er) with dependent child
Dependent: A qualifying child or relative
Exemptions: An amount that reduces the amount of income on which you are taxed. You typically may claim an exemption for yourself, your spouse and for each dependent
Estimated Tax Payments: Payments that are made quarterly to reduce tax liability when tax return is filed
Balance Sheet: Report that shows assets, liabilities and equity
Income Statement: Report that shows revenue and expenses
Fixed Assets: Includes buildings, equipment and land reported on a depreciation schedule to track basis
Depreciation: The process for expensing buildings and equipment over a period of time, reducing basis
Basis: Total cost of assets less any depreciation taken
Assets: Includes cash, investments, buildings, equipment, and land
Liabilities: This is something owed such as loans and accounts payable
Equity: Includes owner contributions and draws, company stock, and cumulative earnings
HSA: Health savings account
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