What Is a Tax Home? A tax home is the general locality of an individual’s primary place of work. It is the entire city or general vicinity where their principal place of business, employment, or post of duty is located, regardless of the location of the individual’s primary residence. An individual’s tax home affects their
What Is a Tax Identification Number (TIN)? A Tax Identification Number (TIN) is a nine-digit number used as a tracking number by the Internal Revenue Service (IRS). It is required information on all tax returns filed with the IRS. All U.S. tax identification numbers (TIN) or tax I.D. numbers are issued directly by the IRS except Social
What Is Tax Indexing? Tax indexing is the adjustment of the various rates of taxation in response to inflation and to avoid bracket creep. Bracket creep occurs when inflation drives income into higher tax brackets, resulting in higher income taxes but no real increase in purchasing power. Tax indexing attempts to eliminate the potential for
What Is Tax Liability? Tax liability is the payment owed by an individual, business, or other entity to a federal, state, or local tax authority. Generally, you have a tax liability when you earn income or generate profits by selling an investment or other asset. It is possible to have no income tax liability if
What Is a Tax Lien? A tax lien is a legal claim against the assets of an individual or business that fails to pay taxes owed to the government. In general, a lien serves to guarantee payment of a debt such as a loan, or in this case, taxes. If the obligation is not satisfied
Taxable Event: An Overview A taxable event is any action or transaction that may result in taxes owed to the government. Common examples of federal taxable events include receiving a payment of interest and dividends, selling stock shares for a profit, and exercising stock options. Receipt of a paycheck is a taxable event. Understanding the
What Is Taxable Income? Taxable income is the portion of your gross income used to calculate how much tax you owe in a given tax year. It can be described broadly as adjusted gross income (AGI) minus allowable itemized or standard deductions. Taxable income includes wages, salaries, bonuses, and tips, as well as investment income and various
What are Taxable Preferred Securities? Taxable preferred securities refers to preferred stock whose dividend payments are not exempt from taxation. Key Takeaways Taxable preferred securities refers to preferred stock whose dividend payments are not exempt from taxation.Taxable preferred securities are usually junior level liabilities, and the coupons tied to them can either be fixed or
What Is the Taxable Wage Base? The term taxable base refers to the maximum amount of earned income on which employees must pay Social Security taxes. The employee’s gross wages are generally equal to the taxable wage base. An employer typically handles this calculation and withholds the correct amount of taxes from each of the
What Is a Tax Advisor? A tax advisor is a financial expert with advanced training and knowledge of tax accounting and tax law. The services of a tax advisor are usually retained in order to minimize taxes payable while remaining compliant with the law in complicated financial situations. Tax advisors can include Certified Public Accounts
