Glossary of Tax Terms
# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Marital Deduction
Market Discount
Marketable Securities
Married Filing Jointly
Married Filing Separately
Material Participation
Meals and Entertainment
Medical Expenses
Medical Savings Account (MSA)
Medicare
Miscellaneous Itemized Deductions
Modified Accelerated Cost Recovery System (MACRS)
Mortgage Interest Expense
Moving Expenses
Multiple Support Agreement
Municipal Bond
For estate tax and gift tax purposes, a deduction that allows you to transfer assets to your spouse tax free.
If you buy a bond in a secondary market, the market discount is the face value of the bond less the sum of the amount you paid for the bond and the amount of accumulated original issue discount (OID) from the date of issue that represented interest to any earlier holders. Bonds are sold for less than their face value when rising interest rates make their stated interest rate less competitive.
In general, stocks and bonds that are easily sold. A marketable security has a readily determined fair market value and can be converted into cash at any time.
The filing status used by most couples who are married as of the end of the tax year. When you file jointly, you combine your income and deductions with those of your spouse on the same tax return.
A filing status you can use if you are married as of the end of the tax year. You and your spouse each file a separate income tax return with your own income and deductions. See also innocent spouse rule.
A term defined by the IRS to determine if you worked and were involved in a business activity on a regular basis or if you were only an investor. If you materially participated in a business activity, you are allowed to deduct any losses from that activity against your ordinary income.
Expenses that are deductible in your business may include meals and entertainment, such as the cost of taking a client to a restaurant and a sporting event. These expenses, however, are only 50 percent deductible unless they meet certain exceptions.
Your reasonable and necessary unreimbursed expenses relating to health care for yourself and your dependents. This includes, but is not limited to, expenses for doctors, dentists, and hospitals, transportation to medical care, prescriptions, and health insurance premiums. You can deduct the portion of your medical expenses with your itemized deductions that exceeds 7.5 percent of your adjusted gross income (AGI).
Similar to an IRA, a medical savings account (MSA) is intended to help self-employed people and employees of certain small businesses to save for and pay their medical expenses that are not covered by health insurance.
The federal insurance program that funds medical care for people age 65 and older and certain disabled people.
Interest paid on a loan secured by your home that is fully deductible up to certain limits. For more information, see "Home Mortgage Interest" in IRS Publication 17, Your Federal Income Tax.
Deductible moving expenses include the reasonable costs of moving yourself, your family, and your possessions for a qualified job-related move. You can no longer deduct the cost of meals while traveling for this move.
A legal document that states who can claim a person as a dependent when two or more people provide more than half of a dependent's support. This agreement is most often used in cases of divorced or separated parents.
A bond issued by a state or local government. Interest you earn on a municipal bond is not subject to federal income tax. The interest may or may not be taxable by your state, depending on its laws. When you sell a municipal bond, you may have a capital gain or a capital loss, subject to the capital gain and loss rules.
