Glossary
AI Finance Glossary
Plain-English definitions of AI, accounting, and SaaS-finance terms.
Categories
A
Alternative Minimum Tax
Parallel tax calculation ensuring high-income taxpayers pay a minimum federal tax regardless of deductions.
At-Risk Rules
Tax rules limiting loss deductions to the amount a taxpayer has economically at risk in an activity.
B
E
Economic Nexus
A sales tax obligation trigger based on the dollar value or number of transactions in a state, regardless of physical presence, established after South Dakota v. Wayfair (2018).
Estate Tax
Federal tax on the transfer of assets from a decedent's estate above a statutory exemption threshold.
Estimated Tax
Quarterly tax payments required from self-employed individuals and businesses that expect to owe $1,000 or more in taxes not covered by withholding.
F
G
H
L
P
Passive Activity Rules
IRS rules limiting deduction of losses from activities in which the taxpayer does not materially participate.
Payroll Tax
Taxes levied on wages and salaries, split between employee withholding and employer contributions, funding social programs like Social Security and Medicare.
Q
Qualified Business Income Deduction
20% deduction for pass-through business income under IRC Section 199A for eligible self-employed taxpayers.
Qualified Opportunity Zone
IRS-designated economically distressed area offering capital gains tax deferral and reduction for long-term investments.
Quarterly Estimated Tax
Prepayment of income and self-employment taxes made four times per year by self-employed individuals and investors.
R
S
Sales Tax Nexus
The level of connection between a business and a state sufficient to require the business to collect and remit sales tax in that state.
Section 179 Deduction
Immediate expensing of qualifying business property rather than depreciating it over multiple years.
Self-Employment Tax
Social Security and Medicare taxes paid by self-employed individuals on net self-employment income.
Step-Up in Basis
Tax rule resetting an inherited asset's cost basis to fair market value at the decedent's date of death.
T
Tax Treaty
Bilateral agreement between countries to reduce double taxation on income earned across borders.
Transfer Pricing
The pricing of goods, services, and intellectual property exchanged between related entities within a multinational company, governed by the arm's length principle.