Tax Glossary
Tax Glossary
There are currently 92 Definitions in this directory beginning with the letter F.
Filing statuses
Five taxpayer categories that determine the amount of tax and/or tax credits that apply to different taxpayers. The five filing statuses are (from lowest to highest tax): Married Filing Jointly; Qualifying Widow(er) with Dependent Child; Head of Household; Single; Married Filing Separately.
First-time Homebuyer Credit
The first-time homebuyer credit is a maximum of $8,000 ($4,000 for Married Filing Separately). This is a refundable credit which means that even if the taxpayer does not owe any tax, the money will be refunded to the taxpayer. There are payback provisions if the home was sold within a 36 month period.
Five-Year Test Period Suspension
Taxpayers can choose to have the five-year test period for ownership and use suspended during any period the homeowner (either spouse if married) served on qualified official extended duty as a member of the uniformed services or Foreign Service of the United States, as an employee of the intelligence community, or as an employee or volunteer of the Peace Corps. This means that the taxpayer may be able to meet the two-year use test even if the taxpayer and/or spouse did not actually live in the home during the normal five-year period required of other taxpayers.
Foreign Earned Income Exclusion
The foreign earned income exclusion allows eligible taxpayers to avoid paying federal income tax on their foreign earned income.
Foreign Tax Credit
U.S. tax credit used to offset any foreign income tax taxpayers have paid on qualified income that is also subject to U.S. federal income tax.
Form 1040
Tax return used to report income from wages, salaries, and tips; qualified tuition program earnings; Alaska Permanent Fund dividends; taxable scholarships and fellowship grants; interest of $1,500 or less; and unemployment compensation.
Form 1040EZ
Tax Return for Single and Joint Filers with No Dependents, used to report income from wages, salaries, and tips, plus income from dividends and interest greater than $1,500; capital gain distributions; IRA, pension, and annuity income; and social security and railroad retirement benefits.
Form 1041 Schedule K-1
Beneficiary's Share of Income, Deductions, Credits, etc. Used by the fiduciary of a domestic decedent's estate, trust, or bankruptcy estate to report income, gains, losses, etc., of the estate or trust.
Form 1065 Schedule K-1
Partner's Share of Income, Deductions, Credits, etc. Used by partnerships to report the taxpayers' share of the partnership's income, deductions, credits, etc.
Form 1098-MA
Form 1098-MA, Mortgage Assistance Payments, is a new information return. The form is used to report to the IRS and homeowners the total amounts of certain mortgage assistance payments made to mortgage servicers. Although, mortgage assistance payments are not included in income, taxpayers cannot deduct interest that is paid for them.
Form 1099-K
Form 1099-K is used to report the proceeds of payment card and third party network transactions made to taxpayers under Internal Revenue Code section 6050W. Merchant card and third party network payers, as payment settlement entities (PSE), must report the proceeds of payment card and third party network transactions made to taxpayers on Form 1099-K.
Form 1099-MISC
Statement showing miscellaneous income (such as rents, royalties, fishing boat proceeds, non-employee compensation, medical and healthcare payments, substitute payments in lieu of dividends or interest, crop insurance proceeds, gross proceeds paid to an attorney, excess golden parachute payments, and other miscellaneous income)
Form 1099-R
Statement showing Distributions from Pensions, Annuities, Retirement or Profit Sharing Plans, IRAs, Insurance Contracts, etc
Form 1120S Schedule K-1
Shareholder's Share of Income , Deductions, Credits, etc. Used by S corporations to report the taxpayers' share of the corporation's income (reduced by any tax the corporation paid on the income), as well as any deductions, credits, etc.
Form 2120
Multiple Support Declaration, allows taxpayers to identify other eligible individuals who paid over 10% of the support of another person.
Form 2210
Underpayment of Estimated Tax by Individual, Estates and Trusts. While completion of the Form 2210 is out of scope, volunteers need to caution taxpayers they will receive a notice of an estimated tax penalty if it is applicable.
Form 4137
Social Security and Medicare Tax on Unreported Tip Income, is used to report unreported tip income.
Form 4852
Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA's, Insurance Contracts, Etc., used by taxpayers who have been unable to obtain (or have received incorrect) wage or distribution statements.
Form 8233
Exemption From Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual
Form 8332
Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. This form allows a taxpayer who is a custodial parent (and who was married to his or her child's noncustodial parent) to release his or her claim on the child's exemption.
Form 8379
Injured Spouse Claim and Allocation, allows taxpayers to request relief from a spouse's past due federal debts, including back child support and past due taxes.
Form 8606
Nondeductible IRAs, reports nondeductible contributions to traditional IRAs and/or distributions taken from certain IRAs. Part I explains in detail when this form is used.
Form 8857
Request for Innocent Spouse Relief. This form explains various forms of relief and who may qualify.
Form 8863
Education Credits, may be used instead of Form 2106, Employee Business Expenses, if education expenses were the only business expenses.
Form 8949
Sales and Other Dispositions of Capital Assets. This form is new in 2010 and used to report capital gains or losses.
Form 9452
Filing Assistance Program, helps taxpayers determine whether they are required to file a federal income tax return.
Form W-2
Wages and Tax Statement, issued by employers to report their employees' earned income for the year. Generally, employers should issue Form W-2 to every employee and a copy to the Social Security Administration.
Form W-4
Employee's Withholding Allowance Certificate is completed by the employee and used by an employer to determine how much to withhold from an employee's paycheck for federal income tax purposes.
Form W-4P
Withholding Certificate for Pension or Annuity Payments. The form allows taxpayers to tell payers the correct amount of federal income tax to withhold from payments.
Form W-4V
Voluntary Withholding Request, filed by taxpayers (or estates) who are recipients of social security benefits and want to request withholding from their payments from the Social Security Administration.
Form W-5
Earned Income Credit Advance Payment Certificate, used by taxpayers who have a qualifying child, may be eligible for the earned income credit, and choose to get advance EIC payments.