Tax Terms: Definitions, Accounting, and Examples
Explore tax terms related to taxable income, tax deductions, tax credits, current and deferred taxes, payroll taxes, sales and consumption taxes, tax returns, withholding, estimated payments, tax liabilities, refunds, audits, assessments, compliance, disputes, and practical accounting examples.
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Tax Terms Learning Path
Follow this sequence to understand tax categories, calculations, accounting, filing, payment, and compliance.
Understand Tax Basics
Learn the difference between taxable income, tax liability, tax expense, payments, deductions, credits, and refunds.
What Are Tax Terms? →Identify the Tax Type
Distinguish income, payroll, sales, consumption, property, withholding, excise, and other tax categories.
Explore Tax Categories →Calculate and Record
Study tax bases, rates, deductions, credits, current tax, deferred tax, journal entries, and supporting schedules.
Explore Tax Calculations →File and Comply
Understand returns, deadlines, estimated payments, audits, assessments, penalties, appeals, and record retention.
Explore Tax Compliance →Major Tax Classifications
Taxes may be classified by the type of income, transaction, employment relationship, property, or legal tax base.
Income Taxes
Taxes generally based on taxable income, business profit, investment income, or another defined income base.
Payroll Taxes
Taxes and statutory amounts connected to wages, salaries, employees, and employer obligations.
Transaction Taxes
Taxes imposed on sales, purchases, value added, goods, services, imports, or selected transactions.
Property and Wealth Taxes
Taxes associated with property, ownership, transfers, estates, gifts, or other defined asset bases.
Browse Tax Terms by Category
Use these collections to find related tax definitions, calculations, accounting concepts, and compliance terms.
Income Tax Terms
Taxable income, tax expense, current tax, deferred tax, deductions, credits, losses, and effective tax rates.
Explore Income Tax Terms →Payroll Tax Terms
Withholding, employer taxes, employee deductions, taxable wages, payroll deposits, and reporting.
Explore Payroll Tax Terms →Sales and Consumption Tax Terms
Sales tax, use tax, value-added tax, input tax, output tax, exemptions, and tax collected from customers.
Explore Sales and Consumption Tax Terms →Tax Accounting Terms
Book-tax differences, temporary differences, permanent differences, deferred tax assets, and deferred tax liabilities.
Explore Tax Accounting Terms →Tax Return and Filing Terms
Tax returns, filing status, deadlines, extensions, amended returns, supporting schedules, and electronic filing.
Explore Tax Return and Filing Terms →Tax Payment Terms
Estimated taxes, withholding, deposits, installments, balances due, refunds, overpayments, and payment plans.
Explore Tax Payment Terms →Tax Compliance Terms
Tax records, documentation, information returns, nexus, registration, assessments, penalties, and interest.
Explore Tax Compliance Terms →Tax Audit and Dispute Terms
Examinations, notices, adjustments, assessments, protests, appeals, settlements, and statutes of limitation.
Explore Tax Audit and Dispute Terms →Essential Tax Terms
Start with these commonly used tax and tax accounting definitions.
Tax
A compulsory charge imposed by a government or taxing authority under applicable law.
View Definition → TTaxpayer
A person or entity subject to tax filing, payment, withholding, collection, or reporting obligations.
View Definition → TTax Authority
A government body responsible for administering, collecting, enforcing, or interpreting tax rules.
View Definition → TTax Jurisdiction
A country, state, province, municipality, or other authority with power to impose tax.
View Definition → TTax Year
The annual period used to calculate and report taxable amounts and tax obligations.
View Definition → CCalendar Tax Year
A tax year beginning on January 1 and ending on December 31.
View Definition → FFiscal Tax Year
A twelve-month tax reporting period ending on a date other than December 31.
View Definition → TTax Return
A form or electronic filing used to report taxable activity, calculate tax, and claim applicable items.
View Definition → TTax Filing
The submission of a required tax return, statement, schedule, or information report.
View Definition → FFiling Deadline
The date by which a tax return, payment, election, or information report must be submitted.
View Definition → FFiling Extension
Additional time granted or elected for filing a tax return, subject to applicable rules.
View Definition → AAmended Tax Return
A revised return submitted to correct or update a previously filed tax return.
View Definition → EElectronic Filing
The submission of a tax return or tax document through an approved electronic system.
View Definition → TTax Base
The amount, value, transaction, property, income, or activity to which a tax rate is applied.
View Definition → TTax Rate
The percentage or amount applied to a tax base to determine tax.
View Definition → SStatutory Tax Rate
A tax rate established by law for a defined tax base or category.
View Definition → MMarginal Tax Rate
The tax rate applied to the next unit of taxable income under a progressive system.
View Definition → EEffective Tax Rate
Total tax expense or tax paid expressed as a percentage of a defined income measure.
View Definition → PProgressive Tax
A tax structure in which higher portions of the tax base are subject to higher rates.
View Definition → PProportional Tax
A tax structure applying a constant rate to the defined tax base.
View Definition → RRegressive Tax
A tax whose burden may represent a larger share of income for lower-income taxpayers.
View Definition → TTaxable Income
Income subject to tax after applying the rules for inclusions, exclusions, deductions, and adjustments.
View Definition → GGross Income
Income before specified deductions, exclusions, or adjustments under the applicable tax rules.
View Definition → AAdjusted Gross Income
A defined income subtotal calculated after specified adjustments under a tax system.
View Definition → TTaxable Revenue
Revenue included in the tax base under applicable tax rules.
View Definition → TTaxable Benefit
A benefit or noncash item included in taxable compensation or income.
View Definition → TTaxable Wages
Compensation subject to one or more payroll or employment taxes.
View Definition → TTax-Exempt Income
Income excluded from tax under applicable law.
View Definition → TTax Exemption
A legal provision removing a person, transaction, item, or amount from tax.
View Definition → TTax Exclusion
An amount or category omitted from taxable income under applicable rules.
View Definition → TTax Deduction
An allowable amount that reduces taxable income or another tax base.
View Definition → SStandard Deduction
A fixed deduction allowed instead of separately claiming qualifying itemized deductions.
View Definition → IItemized Deduction
A qualifying deduction claimed separately and supported by applicable records.
View Definition → BBusiness Deduction
A qualifying business cost allowed to reduce taxable income under applicable rules.
View Definition → CCapital Allowance
A tax deduction or relief related to qualifying capital assets or expenditures.
View Definition → DDepreciation Deduction
A tax deduction allocating the cost of a qualifying tangible asset over time.
View Definition → AAmortization Deduction
A tax deduction allocating the cost of a qualifying intangible or deferred item over time.
View Definition → TTax Credit
An allowable amount that directly reduces tax liability.
View Definition → RRefundable Tax Credit
A credit that may produce a refund when it exceeds the calculated tax liability.
View Definition → NNonrefundable Tax Credit
A credit generally limited to reducing tax liability to zero.
View Definition → FForeign Tax Credit
A credit that may reduce domestic tax for qualifying taxes paid to another jurisdiction.
View Definition → TTax Liability
The amount of tax legally owed for a period, transaction, event, or assessment.
View Definition → CCurrent Tax Liability
Tax payable based on taxable income or transactions for the current reporting period.
View Definition → TTax Payable
A liability account representing tax owed to a taxing authority.
View Definition → TTax Expense
The amount recognized in financial reporting for current and deferred income tax effects.
View Definition → CCurrent Tax Expense
The tax expense or benefit associated with taxable income for the current period.
View Definition → DDeferred Tax Expense
The tax expense or benefit arising from changes in deferred tax balances.
View Definition → DDeferred Tax Asset
A financial reporting asset for future tax benefits from deductible temporary differences or carryforwards.
View Definition → DDeferred Tax Liability
A financial reporting liability for future taxable amounts arising from taxable temporary differences.
View Definition → TTemporary Difference
A difference between the carrying amount and tax base of an asset or liability that reverses in future periods.
View Definition → TTaxable Temporary Difference
A temporary difference expected to create taxable amounts in future periods.
View Definition → DDeductible Temporary Difference
A temporary difference expected to create tax deductions in future periods.
View Definition → PPermanent Difference
A book-tax difference that does not reverse in a future period.
View Definition → BBook-Tax Difference
A difference between financial reporting income or carrying amounts and tax reporting amounts.
View Definition → TTax Base of an Asset
The amount attributed to an asset for tax purposes.
View Definition → TTax Base of a Liability
The carrying amount of a liability adjusted for amounts deductible for tax in future periods.
View Definition → VValuation Allowance
An allowance reducing a deferred tax asset when realization is not sufficiently supported under the applicable framework.
View Definition → UUncertain Tax Position
A tax position whose recognition or measurement depends on uncertainty about acceptance by a tax authority.
View Definition → TTax Provision
A calculation or accounting process estimating tax expense, payable amounts, and deferred tax effects.
View Definition → TTax Reconciliation
A comparison explaining differences between statutory tax and reported tax expense or liability.
View Definition → TTax Rate Reconciliation
A schedule reconciling the statutory tax rate with the effective tax rate.
View Definition → NNet Operating Loss
A tax loss that may be carried to another period when permitted by law.
View Definition → TTax Loss Carryforward
A tax loss available to reduce taxable income in a future period, subject to applicable limitations.
View Definition → TTax Loss Carryback
A tax loss applied to a prior period when permitted by applicable law.
View Definition → TTax Attribute
A tax-related item such as a loss, credit, basis, or deduction available for current or future use.
View Definition → WWithholding Tax
Tax deducted or collected by a payer and remitted to a taxing authority on behalf of another party.
View Definition → PPayroll Tax
A tax or statutory charge associated with wages, employment, employees, or employers.
View Definition → EEmployer Payroll Tax
A payroll-related tax borne by an employer under applicable law.
View Definition → EEmployee Withholding
Tax or other required amount deducted from an employee’s compensation.
View Definition → WWithholding Allowance
A factor or election used in some systems to determine payroll tax withholding.
View Definition → PPayroll Tax Deposit
A remittance of withheld or employer payroll taxes to a tax authority.
View Definition → IIncome Tax Withholding
The deduction of income tax from payments such as wages, interest, or contractor compensation.
View Definition → BBackup Withholding
Mandatory withholding applied to specified payments when required information or conditions are not satisfied.
View Definition → SSales Tax
A transaction tax generally imposed on taxable retail sales of goods or services.
View Definition → UUse Tax
A tax commonly imposed on taxable use, storage, or consumption when sales tax was not collected.
View Definition → VValue-Added Tax
A consumption tax charged on value added at stages of production and distribution.
View Definition → IInput Tax
Value-added tax or similar tax paid on qualifying business purchases.
View Definition → OOutput Tax
Value-added tax or similar tax charged on taxable sales.
View Definition → IInput Tax Credit
A credit or recovery for qualifying tax paid on business inputs.
View Definition → TTax Collected from Customers
Transaction tax charged to customers and held for remittance to the tax authority.
View Definition → SSales Tax Payable
A liability representing sales or transaction tax collected but not yet remitted.
View Definition → TTaxable Sale
A sale subject to transaction tax under applicable rules.
View Definition → EExempt Sale
A sale not subject to tax because of the nature of the item, customer, or transaction.
View Definition → ZZero-Rated Sale
A taxable transaction subject to a zero tax rate under a value-added tax system.
View Definition → RResale Certificate
Documentation supporting a purchase for resale without tax collection at that stage.
View Definition → TTax Nexus
A sufficient connection with a jurisdiction that may create tax registration, collection, or filing obligations.
View Definition → EEconomic Nexus
Tax nexus based on economic activity, sales, transactions, or another statutory threshold.
View Definition → TTax Registration
Enrollment with a tax authority for filing, collection, payment, or identification purposes.
View Definition → TTax Identification Number
A number assigned to identify a taxpayer or registrant for tax administration.
View Definition → EExcise Tax
A tax imposed on specified goods, services, activities, or transactions.
View Definition → PProperty Tax
A tax based on the assessed value or classification of property.
View Definition → AAssessed Value
The value assigned to property for tax purposes.
View Definition → TTransfer Tax
A tax imposed on transferring property, rights, or ownership.
View Definition → CCapital Gains Tax
Tax imposed on qualifying gains from the sale or disposal of capital assets.
View Definition → CCapital Loss
A loss from the sale or disposal of a capital asset, subject to applicable tax rules.
View Definition → CCost Basis
The tax amount assigned to an asset for calculating gain, loss, depreciation, or amortization.
View Definition → AAdjusted Basis
Tax basis after increases, decreases, depreciation, improvements, or other required adjustments.
View Definition → RRealized Gain
The excess of proceeds over tax basis when a transaction occurs.
View Definition → RRecognized Gain
The portion of a realized gain included in taxable income.
View Definition → RRecognized Loss
The portion of a realized loss allowed for tax purposes.
View Definition → TTax Deferral
The postponement of tax recognition or payment to a future period under applicable rules.
View Definition → TTax Election
A choice permitted under tax law that affects treatment, timing, classification, or calculation.
View Definition → TTax Treaty
An agreement between jurisdictions governing specified cross-border tax matters.
View Definition → PPermanent Establishment
A taxable business presence in another jurisdiction under applicable domestic or treaty rules.
View Definition → TTransfer Pricing
The pricing of transactions between related entities for tax and reporting purposes.
View Definition → AArm’s-Length Principle
The principle that related-party transactions should be priced as if between independent parties.
View Definition → TTax Residency
The status determining a person’s or entity’s tax connection to a jurisdiction.
View Definition → SSource of Income
Rules determining the jurisdiction from which income is treated as arising.
View Definition → DDomicile
A legal concept connecting a person or entity with a jurisdiction for specified purposes.
View Definition → EEstimated Tax
Periodic tax paid during the year based on expected taxable income or liability.
View Definition → TTax Installment
A scheduled partial payment toward an expected or assessed tax liability.
View Definition → BBalance Due
Tax remaining payable after credits, withholding, deposits, and prior payments.
View Definition → TTax Refund
An amount returned when tax payments or credits exceed the final tax liability.
View Definition → TTax Overpayment
Tax paid or credited in excess of the final liability.
View Definition → PPayment Plan
An approved arrangement allowing a tax liability to be paid over time.
View Definition → TTax Penalty
An additional charge imposed for noncompliance, late filing, late payment, or another violation.
View Definition → TTax Interest
Interest charged on unpaid tax or paid on qualifying overpayments under applicable rules.
View Definition → LLate Filing Penalty
A charge imposed for filing a required tax document after the deadline.
View Definition → LLate Payment Penalty
A charge imposed for paying tax after the required date.
View Definition → UUnderpayment Penalty
A charge that may apply when required estimated or installment payments are insufficient.
View Definition → RReasonable Cause
A facts-and-circumstances standard that may support relief from selected penalties.
View Definition → TTax Notice
A written or electronic communication from a tax authority about a return, account, payment, or issue.
View Definition → TTax Assessment
A formal determination of tax, penalty, interest, or another amount due.
View Definition → AAdditional Assessment
An increase in tax or related amounts determined after review or examination.
View Definition → TTax Audit
An examination by a tax authority of returns, records, transactions, or reported tax positions.
View Definition → FField Audit
A tax examination conducted at the taxpayer’s business, office, or another location.
View Definition → OOffice Audit
A tax examination conducted through meetings or document review at a tax authority office.
View Definition → CCorrespondence Audit
A tax examination handled primarily through written or electronic communication.
View Definition → TTax Adjustment
A change made to taxable amounts, deductions, credits, liability, or another return item.
View Definition → TTax Dispute
A disagreement between a taxpayer and tax authority regarding a tax position or assessment.
View Definition → PProtest
A formal written disagreement with a proposed tax adjustment or assessment.
View Definition → TTax Appeal
A request for administrative or judicial review of a tax determination.
View Definition → SSettlement
An agreement resolving a tax dispute without completing all remaining procedures.
View Definition → SStatute of Limitations
The legal period during which a tax authority or taxpayer may take specified actions.
View Definition → TTax Record Retention
The preservation of returns, receipts, schedules, invoices, and supporting documents for required periods.
View Definition → IInformation Return
A return reporting payments, transactions, ownership, or other information, often without directly calculating tax.
View Definition → TTax Certificate
A document supporting tax status, withholding treatment, exemption, registration, or compliance.
View Definition → TTax Clearance Certificate
A document indicating that specified tax obligations have been satisfied or addressed.
View Definition → TTax Compliance
Meeting applicable registration, calculation, collection, payment, filing, documentation, and reporting requirements.
View Definition → TTax Avoidance
The lawful arrangement of affairs to reduce tax within applicable rules, subject to anti-avoidance provisions.
View Definition → TTax Evasion
The illegal concealment or misrepresentation of taxable activity to avoid tax.
View Definition →Connect Every Tax Term to the Applicable Jurisdiction and Tax Rule
Tax terminology becomes more useful when connected to the correct jurisdiction, tax type, taxpayer, reporting period, tax base, rate, filing requirement, accounting treatment, supporting documentation, payment deadline, and current law. Detailed definitions and rules may differ between countries and tax authorities.
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Frequently Asked Questions About Tax Terms
What is a tax term?
A tax term is a word or phrase used to describe a tax calculation, tax base, filing requirement, payment, accounting treatment, legal status, or compliance procedure.
What is the difference between a tax deduction and a tax credit?
A deduction generally reduces taxable income or another tax base. A credit generally reduces the calculated tax liability directly, subject to applicable rules.
What is the difference between current and deferred tax?
Current tax relates to taxable income or transactions for the current period. Deferred tax reflects future tax effects of temporary differences and qualifying carryforwards.
What is the difference between sales tax and value-added tax?
Sales tax is commonly collected at the taxable retail transaction. Value-added tax is generally charged through stages of production and distribution, with qualifying input tax credits or recoveries.
Do tax definitions apply the same way in every country?
No. Tax rules, rates, filing requirements, deadlines, and detailed definitions vary by jurisdiction and may change over time. Local professional guidance may be necessary for specific tax decisions.
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