Related Words

Tax Credits: Tax you receive back in certain circumstances, e.g. pension credit, child tax credit and working tax credit.

Net Tax Liability: The amount of tax computed by subtracting tax credits from the gross tax liability.

Tax-Timing Option: Legislation forming part of a larger act designed to balance the federal budget. Some of the legislation's provisions included tax credits for taxpayers supporting children, an increase in t . . . View Full Definition

Tax Credit: A tax credit is an amount you can subtract from the tax you would otherwise owe. Unlike a deduction or exemption, a credit is a dollar-for-dollar reduction of your tax bill. For example, if . . . View Full Definition

Marginal Tax Rate: Because the US income tax system is progressive, your tax rate rises as your taxable income rises through two or more tax brackets. Your marginal tax rate is the rate you pay on the taxable . . . View Full Definition

Tax Differential View (Of Dividend Policy): Allowing the capital gains tax on an asset to be payable only when the gain is realized by selling the asset.

Tax Evasion: Legislation to increase tax revenue by eliminating various taxation loopholes and instituting tougher enforcement procedures in collecting taxes.

Tax Deferred Exchange (1031 Exchange): Under Section 1031 of the Internal Revenue Code, some or all of the realized gain from the exchange of property may not need to be immediately recognized for tax purposes. Both properties in . . . View Full Definition

Tax Equity And Fiscal Responsibility Act Of 1982 (TEFRA): The view that shareholders prefer capital gains over dividends, and hence low payout ratios, because capital gains are effectively taxed at lower rates than dividends.

Tax Deferral Option: An expense that a taxpayer is allowed to deduct from taxable income.