| Definitions
of tax terms: U-Z |
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| One of the
hardest things about taxes is learning the language. You've
got all the forms and instructions, but it seems they're harder
to decipher than your VCR user manual! Here are some of the
more common tax terms to help you become tax fluent in no time. |
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A
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D | E
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| I
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J | K
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L | M
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| Underpayment
Penalty |
A penalty
for not paying enough total estimated
tax and withholding.
You can avoid underpayment penalties by paying a percentage
amount of last year's tax due or of the current year's expected
tax due. You may pay the taxes in combined estimated and withholding
tax payments. |
| Unearned
Income |
Income such as
interest,
dividends,
capital
gains or rents, as opposed to earned
income, such as wages, tips and salaries. |
| Useful
Life |
The number of years
depreciable business property is expected to be productive and
in use. For depreciation
purposes, the IRS has predetermined useful lives for most types
of business properties. |
| Usurious
rate |
A rate based on
unnecessarily or unlawfully high interest; act or practice of
lending money at high interest; sometimes intangible
property taxes are applied to income from usurious rates. |
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| Voluntary
Compliance |
The philosophy
upon which our tax system is based: that U.S. taxpayers voluntarily
comply with the tax laws and report their income and other tax
items honestly. |
| Volunteer
Income Tax Assistance (VITA) |
Volunteer Income
Tax Assistance (VITA) sites are available in most communities
to help with tax return preparation. People volunteer their
time to help their neighbors. The service is free to those with
limited or moderate income people, nonEnglish-speaking, the
elderly and the disabled. Some VITA sites even offer free electronic
filing. |
| Withholding
("Pay-as-you-earn" taxation) |
Also known as the
FIT: federal income tax withholding. This is pay-as-you-earn
taxation. Taxes are taken out of your wages or other income
before you receive the money. They are deposited in an IRS account
and you are credited for these taxes when you file your return.
Taxes also may be withheld from other income, such as dividends
and interest.
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| Zilch
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The amount you
have left after paying your taxes. (Just wanted to see if you
were still reading!) |
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| --Posted Oct. 29, 1999 |
