🧾 General Tax Terms
Capital Gains Tax: Tax on the profit from selling certain assets such as stocks, real estate, or investments.
Deductions: Expenses that can be subtracted from taxable income to reduce overall tax liability.
Estimated Taxes – Quarterly payments individuals or businesses make to cover income that isn’t subject to withholding.
Excise Taxes: Taxes applied to specific goods or activities, collected at purchase or production, such as fuel, alcohol, or tobacco. Read more about excise tax.
Refund – Money the IRS returns when you’ve overpaid your taxes.
Form 1065: IRS form used to report a partnership’s profits, losses, deductions, and credits.
Tax Credits: Amounts that directly reduce the total taxes owed to the government.
- Tax Evasion – Illegal avoidance of paying taxes owed to the government.
Tax Deduction: Expenses subtracted from taxable income to lower overall tax liability.
- Tax Filing – The act of submitting required forms and documents to the IRS or state agencies.
Tax Planning: Strategically organizing finances to maximize legal tax benefits and minimize liabilities.
Tax Year – The 12-month accounting period for reporting income and expenses (usually January–December).
🧱 Business Structure Terms
C Corporation: A corporation structure where owners (shareholders) are taxed separately from the business. Learn more about C corporations here.
- S Corporation: A corporation that meets IRS requirements allowing profits and losses to pass through to shareholders while providing limited liability protection. Read our S corporation guide.
LLC (Limited Liability Company): A business structure combining limited liability with pass-through taxation. Some LLCs may elect to be taxed as a corporation.
Partnership: A business owned and managed by two or more individuals who share profits, losses, and responsibilities.
- Sole Proprietorship: The simplest business form, owned and run by one person, who is personally responsible for business debts.
- Nonprofit Organization – A business created for charitable or public purposes, exempt from federal income tax.
Shareholder – An owner of shares in a corporation.
Member – An owner of an LLC.
📝 Filing & Compliance Terms
- Annual Report: A required yearly document that corporations file with the state, summarizing financial performance and business activities. Read our guide to annual reports.
- Articles of Dissolution: Legal papers filed to formally close a corporation or LLC and end its existence under state law. Learn more about dissolving a business.
Articles of Incorporation / Organization – The legal documents filed with the state to form a corporation or LLC.
- Certificate of Good Standing – Proof from a state that your business complies with registration and filing requirements.
Compliance – Meeting legal and tax requirements through timely filings and accurate reporting.
Entity – A legally recognized organization, such as an LLC or corporation.
Filing Deadline – The due date for submitting required reports or tax returns.
Operating Agreement – An internal LLC document that outlines ownership, roles, and procedures.
Registered Agent: A person or service authorized to receive legal and government documents on behalf of a business. Learn more about registered agents.
💼 Business Administration Terms
Business License: Official permission from a government agency allowing a person or company to legally operate in a specific area. Requirements vary by location and business type. See our business license guide.
EIN (Employer Identification Number): A Federal Tax ID used to identify a business for tax and reporting purposes. Learn more about EINs here.
Form 1040: The standard IRS form individuals use to file annual income taxes. Learn more about Form 1040 and individual taxes here.
Form 1065: IRS form used to report a partnership’s profits, losses, deductions, and credits.
Form 1120: U.S. corporate income tax return form for C corporations.
Form 1120-S: Tax form S corporations use to report income, losses, and dividends to the IRS.
Form 2553: Used by corporations to elect S corporation status for federal taxes.
💰 Tax Strategy & Management Terms
Corporate Tax: Tax on a company’s net income or profits. Learn more in our corporate tax guide.
Depreciation – A deduction that spreads the cost of an asset over its useful life.
Gross Income – Total income before any deductions or adjustments.
Net Income – The profit that remains after subtracting all expenses and taxes.
Payroll Taxes: Taxes on wages paid by employers or withheld from employees’ paychecks, typically covering Social Security, Medicare, and sometimes state or local programs.
Self-Employment Tax: Social Security and Medicare taxes paid by individuals who work for themselves.
- Withholding Tax: Income tax withheld from employees’ paychecks and remitted directly to the government as partial payment of their income taxes.
📌 Other Essential Business Terms
- Amendment – A correction or change made to a previously filed tax return or legal document.
- E-Filing – Submitting your tax return electronically instead of by mail.
IRS (Internal Revenue Service) – The U.S. government agency responsible for tax collection and enforcement.
⭐ Additional Useful Terms
- Entity Classification Election (Form 8832) – Allows businesses to choose how they will be taxed (e.g., LLC electing corporate taxation).
- 1099 Form – Form used to report income from non-employee sources such as freelance or contract work.
Audit – A review by the IRS or state revenue agency to verify the accuracy of tax filings.
- Annual Report: A required yearly document that corporations file with the state, summarizing financial performance and business activities. Read our guide to annual reports.
- Articles of Dissolution: Legal papers filed to formally close a corporation or LLC and end its existence under state law. Learn more about dissolving a business.
Business License: Official permission from a government agency allowing a person or company to legally operate in a specific area. Requirements vary by location and business type. See our business license guide.
C Corporation: A corporation structure where owners (shareholders) are taxed separately from the business. Learn more about C corporations here.
Capital Gains Tax: Tax on the profit from selling certain assets such as stocks, real estate, or investments.
Corporate Tax: Tax on a company’s net income or profits. Learn more in our corporate tax guide.
Deductions: Expenses that can be subtracted from taxable income to reduce overall tax liability.
EIN (Employer Identification Number): A Federal Tax ID used to identify a business for tax and reporting purposes. Learn more about EINs here.
Excise Taxes: Taxes applied to specific goods or activities, collected at purchase or production, such as fuel, alcohol, or tobacco. Read more about excise tax.
Form 1040: The standard IRS form individuals use to file annual income taxes. Learn more about Form 1040 and individual taxes here.
Form 1065: IRS form used to report a partnership’s profits, losses, deductions, and credits.
Form 1120: U.S. corporate income tax return form for C corporations.
Form 1120-S: Tax form S corporations use to report income, losses, and dividends to the IRS.
Form 2553: Used by corporations to elect S corporation status for federal taxes.
LLC (Limited Liability Company): A business structure combining limited liability with pass-through taxation. Some LLCs may elect to be taxed as a corporation.
Partnership: A business owned and managed by two or more individuals who share profits, losses, and responsibilities.
Payroll Taxes: Taxes on wages paid by employers or withheld from employees’ paychecks, typically covering Social Security, Medicare, and sometimes state or local programs.
Registered Agent: A person or service authorized to receive legal and government documents on behalf of a business. Learn more about registered agents.
S Corporation: A corporation that meets IRS requirements allowing profits and losses to pass through to shareholders while providing limited liability protection. Read our S corporation guide.
Schedule C: IRS form used by sole proprietors to report business income or losses.
Self-Employment Tax: Social Security and Medicare taxes paid by individuals who work for themselves.
Sole Proprietorship: The simplest business form, owned and run by one person, who is personally responsible for business debts.
Tax Credits: Amounts that directly reduce the total taxes owed to the government.
Tax Deduction: Expenses subtracted from taxable income to lower overall tax liability.
Tax Evasion: Illegal avoidance of paying taxes owed to the government.
Tax Planning: Strategically organizing finances to maximize legal tax benefits and minimize liabilities.
Withholding Tax: Income tax withheld from employees’ paychecks and remitted directly to the government as partial payment of their income taxes.
