Glossary of Tax Terms

Online Tax Return

An online statement, on an officially prescribed form, of income, deductions, exemptions, etc., and taxes due.

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Ordinary and Necessary Business Expenses

Business expenses that are fully deductible as current expenses, as opposed to unreasonable expenses and capital expenditures.

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Ordinary Dividends

Dividends that are distributions of a company's profits. They are fully taxable.

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Ordinary Income

Income that does not qualify as a capital gain. Wages, interest, dividends, and net income from a business are examples of ordinary income.

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Ordinary Loss

A loss that is not a capital loss and that is fully deductible against ordinary income.

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Original Issue Discount (OID)

The type of bond discount that occurs when a bond is issued for a price less than its face amount or principal amount. The OID is the difference between the principal amount and the issue price. See also market discount.

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Out of the Country

For purposes of the two-month extension of time to file, you are out of the country if:

• You live outside the United States and Puerto Rico, and your main place of work is also outside the United States and Puerto Rico, or
• You are in military or naval service outside of the United States and Puerto Rico.

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