Tax Court Petition refers to a formal request submitted to the United States Tax Court by a taxpayer who disputes a tax deficiency or a proposed adjustment made by the Internal Revenue Service (IRS). The petition initiates a legal process where the taxpayer seeks to challenge the IRS's determination, typically following a Notice of Deficiency....

Tax Credits for Low-Income Housing Development refer to federal and state tax incentives designed to encourage the development and rehabilitation of affordable housing for low-income individuals and families. These credits reduce the amount of tax owed by developers in exchange for their investment in low-income housing projects. The most notable program in the United States...

Tax Deduction A tax deduction is an expense that can be subtracted from an individual's or business's total taxable income to reduce the amount of tax owed to the government. This deduction lowers the taxpayer's taxable income, which in turn decreases their overall tax liability. For example, if an individual earns $50,000 and qualifies for...

Tax Deduction Limits on Charitable Gifts refer to the maximum amounts that taxpayers can deduct from their taxable income for contributions made to qualifying charitable organizations. In general, for individual taxpayers, the limit is typically 60% of their adjusted gross income (AGI) for cash donations to public charities. For donations of property, the limits may...

Tax Deductions for Professional Athletes Tax deductions for professional athletes refer to specific expenses that can be subtracted from their total income when calculating taxable income. These deductions may include costs related to training, travel for competition, agent fees, and equipment purchases. For example, if a professional athlete incurs expenses for a personal trainer or...

Tax Deductions for Scientific Research refer to specific expenses that businesses can deduct from their taxable income when conducting scientific research and development (R&D) activities. These deductions are designed to encourage innovation by allowing companies to reduce their taxable income based on qualified expenditures. Qualified expenses may include salaries of researchers, costs of materials and...

Tax Deferral refers to the postponement of tax liability to a future date, allowing an individual or entity to delay the payment of taxes on income or gains until a later time. This strategy is often used in retirement accounts, such as 401(k)s or IRAs, where contributions are made pre-tax, and taxes are only paid...

Tax-Deferred Account A Tax-Deferred Account is a financial account that allows individuals to postpone paying taxes on income and investment gains until a later date, usually when funds are withdrawn. Contributions to these accounts are often made with pre-tax dollars, meaning they reduce taxable income in the year they are contributed. Common examples of tax-deferred...

Tax-Deferred Retirement Accounts refer to investment accounts that allow individuals to postpone paying taxes on the income and gains generated within the account until withdrawals are made, typically during retirement. These accounts, such as Traditional IRAs and 401(k) plans, enable individuals to contribute pre-tax income, reducing their taxable income in the year of contribution. Taxes...

Tax Diversification refers to the strategy of spreading investments across different types of accounts that are taxed in various ways. This approach allows investors to manage their tax liability more effectively over time. Tax diversification typically involves three main types of accounts: Taxable Accounts: Investments in these accounts are subject to capital gains taxes and...