A Glossary Of Tax Accounting Terms

Every industry has its own language and terms. These words and phrases can be confusing to anyone who is not part of the daily operations of a specific industry, and the tax accounting business is no exception.

To help you understand the terms, acronyms, and phrases regularly used when working with tax accountants, Edrien Inc. has created this handy reference guide. Here you’ll find valuable information allowing you to comprehend and communicate your tax accounting needs effectively.

MFJ
MFJ refers to Married Filing Jointly (a form of filing status).

MFS
MFS refers to Married Filing Separate (a form of filing status).

HOH
HOH refers to Head Of Household (a form of filing status).

S
S refers to Single (a form of filing status).

AGI
The AGI or Adjusted Gross Income (total amount of income after any adjustments are made. In other words, it’s your total income).

Itemized
It refers to any deduction from your income mostly used under personal income, under Schedule A.

IRA
Individual Retirement Account or IRA is an individual’s retirement account 401K or 403b.

IRA - Roth
It is the second form of retirement for individuals where all taxes are removed (IRA-Traditional vs. IRA-Roth).

MAGI
MAGI or Modified Adjusted Gross Income determines if a private individual qualifies for any tax credit(s) or exemptions.

MACRS
MACRS or Modified Accelerated Cost Recovery System is the current system allowed in the United States to calculate tax deductions on account of depreciation for depreciable assets (other than intangible assets). IRS Form 4562 is used to claim a depreciation deduction.

LLC
LLC or Limited Liability Company or Corporation is another form of company business entities.

LLP
LLP or Limited Liability Partnership is another form of company business entities.

LP
LP or Limited Partnership is the status of a partnership and another form of company business entities.

NIIT
NIIT or Net Investment Income Tax applies to most trusts that are subject to income tax but does not apply to tax-exempt.

NOL
NOL or Net Operation Loss is the deduction to your business operation(s).

If you’re looking for tax accountants in Baltimore MD, reach out to the experts at Edrien Inc. We offer our accounting, bookkeeping, tax preparation, tax returns, tax filings, notary and immigration consultation services across Frederick, Bethesda, Gettysburg, Rockville, Baltimore, Aberdeen, Columbia, Essex, Glen Burnie, Odenton, Towson, Pasadena, White Marsh and surrounding areas. As a family-owned business, we are well-versed with several industries and can offer various professionals advanced tax accounting services that meet IRS regulations. Besides providing professional services, we aim to commit to our client’s satisfaction.

To view our full list of services, please click here, or get in touch with us here.