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Tax Glossary
Tax Glossary
Tax & Accounting Glossary (A–Z)
Searchable A–Z glossary. terms showing (out of 160).
A
Accounting method
DefinitionThe set of rules a taxpayer uses to determine when income and expenses are reported. Common methods include the cash method and the accrual method.
Accounting period
DefinitionThe fixed period covered by financial records or a tax return, usually a calendar year or fiscal year.
Accrual method
DefinitionAn accounting method that generally records income when it is earned and expenses when they are incurred, even if cash changes hands later.
Additional Child Tax Credit
DefinitionThe refundable portion of the Child Tax Credit available when applicable requirements are met. The amount and eligibility rules depend on current law.
Additional Medicare Tax
DefinitionAn additional federal Medicare tax that may apply to wages, compensation, and self-employment income above thresholds set by law. Employers may have withholding duties even when final liability depends on filing status.
Adjusted basis
DefinitionAn asset’s original tax basis increased or decreased by items such as improvements, depreciation, or certain transaction costs. It is used to calculate gain, loss, and some deductions.
Adjusted Gross Income (AGI)
DefinitionGross income minus specific adjustments allowed before the standard or itemized deduction is applied. AGI affects eligibility for many deductions, credits, and other tax provisions.
Alternative Minimum Tax (AMT)
DefinitionA parallel federal income-tax calculation that limits or adjusts certain deductions and preferences. A taxpayer pays AMT only when the tentative minimum tax exceeds regular tax under applicable rules.
Amended return
DefinitionA return filed to correct or update a previously filed tax return. Individuals generally use Form 1040-X to amend a federal income tax return.
Amortization
DefinitionThe recovery of certain costs over a set period, often for intangible assets or startup expenses. It is similar to depreciation but applies to different types of costs.
Annuity
DefinitionA contract or arrangement that provides payments over time, often for retirement income. The taxable portion of each payment depends on how the annuity was funded and structured.
Audit
DefinitionA review of a tax return or account by a taxing authority to verify that income, deductions, credits, and tax were reported correctly. An audit does not automatically mean the taxpayer did something wrong.
B
Backup withholding
DefinitionFederal income tax withholding that may apply to certain payments when required taxpayer information is missing or incorrect, or when the IRS directs the payer to withhold.
Bad debt
DefinitionMoney owed that becomes partly or wholly uncollectible. A tax deduction may be available only when applicable business or nonbusiness bad-debt requirements are met.
Balance due
DefinitionThe unpaid amount shown on a tax return or notice after payments, withholding, and credits are applied. Interest and penalties may continue until the balance is paid.
Basis
DefinitionA tax measure of a taxpayer’s investment in property, commonly starting with cost. Basis is used to determine depreciation and gain or loss when property is sold or disposed of.
Beneficiary
DefinitionA person or entity designated to receive property, insurance proceeds, trust assets, or retirement benefits. Tax treatment depends on the type of asset and distribution.
Bookkeeping
DefinitionThe process of recording and organizing a business’s financial transactions. Reliable bookkeeping supports accurate financial statements, payroll, and tax filings.
Business and Occupation (B&O) tax
DefinitionA Washington tax imposed on the gross receipts of many businesses. It generally applies without deductions for ordinary business costs, and the classification and rate depend on the activity.
Business expenses
DefinitionA cost of carrying on a trade or business. To be federally deductible, an expense generally must be ordinary, necessary, properly documented, and not personal or capital in nature.
Business income
DefinitionIncome received from operating a trade or business. It may include payments for goods or services and is generally reported on the return appropriate to the business structure.
Business structure
DefinitionThe legal form of a business, such as sole proprietorship, partnership, limited liability company, S corporation, or C corporation. Structure affects liability, ownership, administration, and tax reporting.
Business use of home
DefinitionUse of part of a home for business that may qualify for a deduction when applicable requirements are met. The space generally must be used regularly and exclusively for the business, subject to specific exceptions and limitations.
C
C corporation
DefinitionA corporation taxed separately from its owners under Subchapter C of the Internal Revenue Code. Distributions to shareholders can create a second level of tax when treated as dividends.
Capital asset
DefinitionProperty generally held for investment or personal purposes, such as stocks or real estate. Certain business property, inventory, and receivables are excluded from this category.
Capital expenditure
DefinitionA cost that creates or improves an asset with a useful life extending beyond the current year. It is generally capitalized and recovered over time rather than deducted immediately.
Capital gain
DefinitionThe amount by which proceeds from selling or exchanging a capital asset exceed its adjusted basis. Tax treatment can depend on how long the asset was held and other circumstances.
Capital loss
DefinitionThe amount by which a capital asset’s adjusted basis exceeds the proceeds from its sale or exchange. Rules limit how some capital losses may offset other income.
Cash method
DefinitionAn accounting method that generally reports income when received and expenses when paid. Special rules can require a different treatment for certain items.
Charitable contribution
DefinitionA gift to a qualified organization for which a deduction may be available when legal and documentation requirements are met. Personal benefit received in return can reduce the deductible amount.
Child and Dependent Care Credit
DefinitionA federal credit that may apply to qualifying care expenses paid so an eligible taxpayer can work or look for work. Relationship, earned-income, provider, and expense rules apply.
Child Tax Credit
DefinitionA federal credit for taxpayers who meet requirements for a qualifying child. Eligibility and the refundable portion depend on current law and the taxpayer’s circumstances.
Cost basis
DefinitionThe starting tax basis of property, usually its purchase price plus certain acquisition costs. Later adjustments may produce an adjusted basis.
Cost of goods sold (COGS)
DefinitionThe direct cost of inventory sold during a period. It is generally subtracted from gross receipts to determine gross profit rather than treated as an ordinary operating expense.
Credit for Other Dependents
DefinitionA federal credit that may apply to a qualifying dependent who does not qualify for the Child Tax Credit. Eligibility depends on dependency and identification requirements.
D
Dependent
DefinitionA qualifying child or qualifying relative who meets tax-law tests involving relationship, residency, support, income, and other factors. Claiming a dependent can affect filing status and eligibility for tax benefits.
Depreciation
DefinitionThe tax recovery of the cost of qualifying property over its useful recovery period. The allowable method and timing depend on the asset and how it is used.
Direct deposit
DefinitionAn electronic transfer of a tax refund or other payment into a financial account. Accurate routing and account information are required.
Dividend
DefinitionA distribution from a corporation to a shareholder, commonly paid from earnings and profits. Dividends may be taxed as ordinary or qualified dividends depending on the requirements.
E
Earned income
DefinitionIncome from working, including wages, salaries, tips, and net earnings from self-employment. It is treated differently from investment and other unearned income for some tax rules.
Earned Income Tax Credit (EITC)
DefinitionA refundable federal credit for eligible workers with low to moderate earned income. Eligibility depends on income, filing status, qualifying children, residency, and other requirements.
Education credit
DefinitionA federal credit for eligible higher-education expenses, such as the American Opportunity or Lifetime Learning Credit. Student, institution, income, and expense rules determine eligibility.
Electronic Federal Tax Payment System (EFTPS)
DefinitionA U.S. Treasury system for making federal tax payments electronically. Enrollment and timely scheduling are required for payments to be credited as intended.
Electronic filing (e-file)
DefinitionSubmitting a tax return electronically through an authorized system. E-filed returns are generally processed faster than paper returns and still require identity and signature verification.
Employee
DefinitionA worker whose employer generally controls what work is performed and how it is done under applicable common-law rules. Employers usually withhold and report payroll taxes for employees.
Employer Identification Number (EIN)
DefinitionA federal tax identification number assigned to a business or other entity. It is used on tax filings, payroll reports, and certain financial accounts.
Estimated tax
DefinitionPeriodic tax payments made during the year on income not fully covered by withholding. Individuals and businesses may need estimated payments to avoid an underpayment penalty.
Excise tax
DefinitionA tax imposed on particular goods, services, activities, or transactions rather than on general income. Federal, state, and local excise taxes can apply.
F
Fair market value (FMV)
DefinitionThe price at which property would change hands between a willing buyer and willing seller when neither is under pressure and both know the relevant facts.
Federal Insurance Contributions Act (FICA) taxes
DefinitionPayroll taxes that fund Social Security and Medicare. Employees and employers generally each pay a share, while self-employed individuals generally pay comparable taxes through self-employment tax.
Federal tax deposit
DefinitionA payment of employment, excise, or other federal taxes deposited under IRS timing and electronic-payment rules. Deposit deadlines can differ from return filing deadlines.
Filing status
DefinitionA category that determines tax rates, the standard deduction, and eligibility for certain tax benefits. Federal statuses include single, married filing jointly, married filing separately, head of household, and qualifying surviving spouse.
Fiscal year
DefinitionA 12-month accounting period ending on the last day of a month other than December. Some businesses and organizations use a fiscal year instead of a calendar year.
Flexible Spending Arrangement (FSA)
DefinitionAn employer-sponsored account that lets employees use pre-tax money for eligible expenses, such as qualified medical or dependent-care costs. Unused funds may be limited by plan rules.
Form 1040
DefinitionThe primary federal individual income tax return. Taxpayers use it with applicable schedules to report income, deductions, credits, payments, and tax.
Form 1040-X
DefinitionThe federal form individuals generally use to amend a previously filed Form 1040-series return. Supporting forms and explanations may be required.
Form 1065
DefinitionThe federal information return generally filed by a partnership. It reports partnership activity and provides each partner a Schedule K-1.
Form 1099
DefinitionA family of information returns used to report various payments and transactions, such as nonemployee compensation, interest, dividends, or retirement distributions. Receiving or not receiving a form does not by itself determine whether income is taxable.
Form 1120
DefinitionThe federal income tax return generally filed by a C corporation. The corporation reports its own income, deductions, credits, and tax.
Form 1120-S
DefinitionThe federal income tax return generally filed by an S corporation. Income and other items usually pass through to shareholders on Schedule K-1.
Form 940
DefinitionThe annual federal unemployment tax return used by employers subject to Federal Unemployment Tax Act requirements.
Form 941
DefinitionThe quarterly federal employment tax return used by most employers to report wages, federal income tax withholding, and Social Security and Medicare taxes.
Form W-2
DefinitionThe annual wage and tax statement an employer provides to an employee and the government. It reports wages, withholding, and certain benefit information.
Form W-4
DefinitionThe form an employee gives an employer to help determine federal income tax withholding from wages. It should be reviewed when personal or financial circumstances change.
Form W-9
DefinitionA form used to provide a taxpayer identification number and certifications to a requester. It helps the requester prepare applicable information returns.
Franchise tax
DefinitionA state or local tax imposed for the privilege of doing business or maintaining an entity in a jurisdiction. It may be based on income, net worth, capital, or another measure.
G
Garnishment
DefinitionA legal process that directs part of wages or other payments to a creditor. A tax levy on wages is a specific collection action governed by tax law.
Gross income
DefinitionIncome from all sources unless tax law specifically excludes it. It can include wages, business income, interest, rents, gains, and other receipts.
Gross profit
DefinitionGross receipts from sales minus cost of goods sold. It does not subtract general operating expenses.
Gross receipts
DefinitionThe total amounts received from business activities before subtracting costs or expenses. Washington B&O tax commonly uses gross receipts as its starting measure.
H
Head of household
DefinitionA federal filing status for certain unmarried or considered-unmarried taxpayers who pay more than half the cost of keeping up a home for a qualifying person. Specific relationship and residency rules apply.
Health Savings Account (HSA)
DefinitionA tax-advantaged account available to eligible individuals covered by a qualifying high-deductible health plan. Contributions, distributions, and account eligibility are subject to federal rules and annual limits.
Hobby loss rules
DefinitionRules that limit deductions when an activity is not engaged in for profit. Income from the activity may still be taxable, and the facts and circumstances determine whether it is a business or hobby.
Home office deduction
DefinitionA deduction that may apply to qualifying business use of a home. Regular and exclusive use is generally required, along with other rules based on the taxpayer’s status and activity.
I
Identity Protection PIN (IP PIN)
DefinitionA six-digit number issued by the IRS to help prevent misuse of a taxpayer’s Social Security number or Individual Taxpayer Identification Number on federal returns.
Income tax withholding
DefinitionFederal income tax an employer or other payer deducts from payments and sends to the IRS. The amount is credited toward the recipient’s tax liability.
Independent contractor
DefinitionA self-employed worker who generally controls how services are performed rather than being subject to an employer’s control. Classification depends on the actual relationship, not merely a contract or label.
Individual Retirement Arrangement (IRA)
DefinitionA tax-advantaged personal retirement account or annuity. Contribution deductions and distribution rules depend on the type of IRA and the taxpayer’s circumstances.
Individual Taxpayer Identification Number (ITIN)
DefinitionA tax-processing number issued by the IRS to certain individuals who need a U.S. taxpayer identification number but are not eligible for a Social Security number. It does not provide work authorization or immigration status.
Information return
DefinitionA form filed with a taxing authority to report payments or transactions involving another person or business. Examples include Forms W-2 and 1099.
Innocent spouse relief
DefinitionPotential relief from joint-return liability when statutory requirements are met. Different forms of relief apply depending on the facts and timing.
Installment agreement
DefinitionAn IRS payment plan that allows an eligible taxpayer to pay a tax debt over time. Interest and applicable penalties generally continue until the balance is paid.
Interest income
DefinitionCompensation for the use of money, commonly earned from bank accounts, bonds, or loans. It is generally taxable unless a specific exclusion applies.
Inventory
DefinitionGoods held for sale or materials used to produce goods for sale. Inventory accounting affects cost of goods sold and taxable business income.
IRS audit
DefinitionAn IRS examination of a return or account to verify that tax information was reported correctly. It may be conducted by mail, at an IRS office, or in person.
Itemized deductions
DefinitionEligible personal deductions listed on Schedule A, such as certain taxes, interest, charitable contributions, or medical expenses. Taxpayers generally choose between itemizing and taking the standard deduction.
J
Joint and several liability
DefinitionA rule under which each spouse on a joint federal return can generally be responsible for the entire tax, interest, and penalties. Limited relief may be available when legal requirements are met.
L
Late-filing penalty
DefinitionA penalty that may apply when a required tax return is filed after its deadline without reasonable cause. It is separate from the late-payment penalty.
Late-payment penalty
DefinitionA penalty that may apply when tax is not paid by its due date. Filing an extension generally does not postpone the payment deadline.
Limited liability company (LLC)
DefinitionA business entity formed under state law that generally provides limited liability to its owners. Federal tax classification depends on the number of owners and any election made.
Long-term capital gain or loss
DefinitionGain or loss from a capital asset generally held for more than one year. Long-term gains may qualify for different tax rates, while loss deductions remain subject to limitations.
M
Marginal tax rate
DefinitionThe tax rate applied to the next dollar of taxable income within a graduated rate system. It is not necessarily the rate paid on all income.
Married filing jointly
DefinitionA filing status generally available to married couples who combine income, deductions, credits, and tax on one return. Both spouses usually share responsibility for the return.
Married filing separately
DefinitionA filing status under which married spouses generally report their own income, deductions, and credits on separate returns. Special limitations often apply.
Modified Adjusted Gross Income (MAGI)
DefinitionAdjusted gross income modified by adding back or changing specified items for a particular tax rule. There is no single MAGI formula for every deduction or credit.
N
Net earnings from self-employment
DefinitionThe amount generally used to determine self-employment tax after applying the rules for self-employment income and deductions. It is not always identical to Schedule C net profit.
Net income
DefinitionIncome remaining after allowable costs and expenses are subtracted from revenue. The tax calculation depends on the taxpayer and type of activity.
Net operating loss (NOL)
DefinitionA tax loss generally arising when allowable business deductions exceed income under applicable rules. Carryforward and deduction limitations depend on current law.
Nexus
DefinitionA sufficient connection between a taxpayer and a jurisdiction that allows the jurisdiction to impose tax or filing duties. The required connection varies by tax and law.
Nonrefundable tax credit
DefinitionA credit that can reduce tax to zero but generally does not create a refund beyond payments already made. Some credits have both refundable and nonrefundable portions.
O
Offer in Compromise (OIC)
DefinitionAn IRS program that may settle an eligible tax debt for less than the full amount owed when acceptance requirements are met. The IRS considers ability to pay, income, expenses, and asset equity, and not every taxpayer qualifies.
Ordinary and necessary expense
DefinitionA business expense that is common and accepted in the field and helpful and appropriate for the business. It need not be indispensable, but personal expenses are generally not deductible.
Ordinary income
DefinitionIncome taxed under the regular rules rather than special capital-gain rates. Examples can include wages, interest, and many types of business income.
P
Partnership
DefinitionA business relationship in which two or more persons carry on a venture and share profits and losses. A partnership generally files an information return while tax items pass through to partners.
Passive activity
DefinitionA trade, business, or rental activity in which the taxpayer does not materially participate, subject to special rules. Passive losses generally can offset only passive income unless an exception applies.
Payroll tax
DefinitionA tax connected with wages and employment, including federal income tax withholding, Social Security, Medicare, and unemployment taxes. Employers have deposit and reporting responsibilities.
Penalty
DefinitionAn additional amount imposed for failing to meet a tax obligation, such as filing, paying, depositing, or reporting on time. Some penalties may be reduced when statutory relief or reasonable cause applies.
Personal property
DefinitionProperty other than real estate. Tax treatment varies depending on whether it is tangible or intangible and whether it is held for personal, investment, or business use.
Q
Qualified business income (QBI)
DefinitionCertain net income from an eligible trade or business used to determine the federal QBI deduction. The deduction is subject to exclusions, thresholds, and other limitations.
Qualified charitable organization
DefinitionAn organization eligible to receive tax-deductible charitable contributions under federal law. Donors should verify status and retain required documentation.
R
Real property
DefinitionLand and property permanently attached to land, such as buildings. Tax rules can differ for real property used personally, as an investment, or in a business.
Reasonable cause
DefinitionA facts-and-circumstances standard that may support relief from certain penalties when a taxpayer exercised ordinary business care but could not comply. It does not apply automatically.
Recordkeeping
DefinitionMaintaining documents that support income, expenses, deductions, credits, basis, payroll, and other reported items. Records should be retained for the period required by applicable law and the taxpayer’s circumstances.
Refund
DefinitionAn amount returned when payments and refundable credits exceed the tax due, subject to offsets or other adjustments. A refund is not necessarily the same as a taxpayer’s income or tax savings.
Refundable tax credit
DefinitionA credit that may produce a refund even when it exceeds the tax otherwise due. Eligibility and refundability depend on the specific credit’s rules.
Required Minimum Distribution (RMD)
DefinitionThe minimum amount an owner or beneficiary may be required to withdraw annually from certain retirement accounts. Starting ages, deadlines, and exceptions depend on the account, owner, and beneficiary rules.
Reseller permit
DefinitionA Washington permit that generally allows a business to buy qualifying goods for resale without paying retail sales tax at purchase. It does not apply to items the business will use itself.
Retail sales tax
DefinitionA Washington tax imposed on sales of many goods and specified services to consumers. Sellers generally collect it from customers and remit it to the Department of Revenue.
Roth IRA
DefinitionAn individual retirement arrangement funded with nondeductible contributions. Qualified distributions may be tax-free, and original owners generally are not required to take lifetime RMDs.
S
S corporation
DefinitionA qualifying corporation that elects pass-through federal tax treatment under Subchapter S. Income and other tax items generally pass through to shareholders, although entity-level taxes can still apply in limited situations.
Sales tax
DefinitionA tax on qualifying retail sales of goods and services. In Washington, sellers generally collect state and local retail sales tax based on applicable sourcing rules.
Schedule A
DefinitionThe federal schedule individuals use to report itemized deductions. A taxpayer generally uses it only when itemizing instead of taking the standard deduction.
Schedule C
DefinitionThe federal schedule generally used by a sole proprietor to report business income and expenses. Its net profit or loss flows to the individual’s federal return.
Schedule E
DefinitionThe federal schedule used to report certain rental, royalty, partnership, S corporation, estate, trust, and residual-interest income or loss.
Schedule SE
DefinitionThe federal schedule used to calculate self-employment tax. It is generally based on net earnings from self-employment.
Section 179 deduction
DefinitionAn election that may allow a business to deduct some or all of the cost of qualifying property in the year it is placed in service. Annual limits, taxable-income limits, and eligibility rules apply.
Self-employment tax
DefinitionSocial Security and Medicare taxes generally imposed on net earnings from self-employment. It is calculated separately from income tax.
SEP IRA
DefinitionA Simplified Employee Pension arrangement under which an employer contributes to IRAs established for eligible employees. Contributions and plan operation are subject to federal requirements and annual limits.
Short-term capital gain or loss
DefinitionGain or loss from a capital asset generally held for one year or less. Net short-term gains are generally taxed as ordinary income.
SIMPLE IRA
DefinitionA retirement plan for eligible small employers that allows employee salary-reduction contributions and required employer contributions. Federal eligibility, notice, and contribution rules apply.
Single filing status
DefinitionA federal filing status generally used by an unmarried taxpayer who does not qualify for another status. Marital status is usually determined as of the last day of the tax year.
Social Security tax
DefinitionThe portion of FICA or self-employment tax that funds Social Security. It generally applies to covered earnings up to an annually adjusted wage base.
Sole proprietorship
DefinitionAn unincorporated business owned by one individual. Business income and expenses are generally reported on the owner’s individual return.
Standard deduction
DefinitionA fixed deduction that reduces taxable income for taxpayers who do not itemize. The amount depends on filing status and other factors and is generally adjusted under current law.
State income tax
DefinitionA tax imposed by a state on income. Washington does not impose a broad individual income tax, although other state taxes may apply.
Statute of limitations
DefinitionThe legal period for assessing tax, claiming a refund, or collecting a tax debt. The period can vary and may be extended or suspended in specified circumstances.
T
Tax bracket
DefinitionA range of taxable income taxed at a particular marginal rate. Moving into a higher bracket generally affects only income within that bracket.
Tax credit
DefinitionAn amount that directly reduces tax liability, subject to the credit’s requirements. A credit may be refundable, nonrefundable, or partly refundable.
Tax deduction
DefinitionAn allowable amount that reduces income subject to tax rather than directly reducing the tax itself. Its value depends on the applicable tax rules and the taxpayer’s circumstances.
Tax extension
DefinitionAdditional time to submit a tax return when a valid extension is obtained. An extension to file generally does not extend the deadline to pay tax owed.
Tax levy
DefinitionA legal seizure of property or rights to property to collect a tax debt. It can reach items such as bank funds, wages, or other assets after required procedures.
Tax liability
DefinitionThe total tax legally owed before subtracting certain payments or credits, or the remaining amount due after they are applied, depending on context.
Tax lien
DefinitionA legal claim securing payment of a tax debt against a taxpayer’s property and rights to property. A federal tax lien arises after assessment, notice and demand, and nonpayment; a public notice may affect other creditors.
Tax return
DefinitionA form filed with a taxing authority to report tax information, calculate liability, or claim a refund or benefit. Filing requirements depend on the taxpayer and tax involved.
Tax transcript
DefinitionAn IRS record showing selected information from a return, account, wage report, or other tax record. A transcript is not always a complete copy of the filed return.
Tax year
DefinitionThe annual accounting period covered by a tax return. It is commonly a calendar year but may be an approved fiscal year.
Tax-deferred
DefinitionA tax treatment that postpones recognition of income or gain until a later event, such as a retirement-account distribution. Tax-deferred does not necessarily mean tax-free.
Tax-exempt
DefinitionNot subject to a particular tax under applicable law. Tax-exempt treatment may apply only to specified income, organizations, property, or transactions.
Taxable income
DefinitionThe amount of income subject to income tax after allowable adjustments and deductions. It is used with applicable tax rates to calculate income tax.
Taxpayer Identification Number (TIN)
DefinitionAn identifying number used for tax administration, such as a Social Security number, EIN, or ITIN. The appropriate number depends on the taxpayer and purpose.
Treasury regulations
DefinitionOfficial rules issued by the U.S. Department of the Treasury to interpret and administer the Internal Revenue Code. They carry legal authority within their scope.
U
Underpayment penalty
DefinitionA charge that may apply when required tax payments were not made in sufficient amounts during the year or by required dates. Safe harbors and exceptions may apply.
Unearned income
DefinitionIncome not received for performing services, such as interest, dividends, capital gains, pensions, or some distributions. Different tax rules may apply depending on the source.
Unemployment tax
DefinitionA tax supporting unemployment compensation programs. Employers may owe federal FUTA tax and applicable state unemployment taxes under separate rules.
Use tax
DefinitionA tax generally due when taxable goods or services are used in a jurisdiction and retail sales tax was not paid. Washington use tax applies to both individuals and businesses in applicable situations.
W
Wages
DefinitionCompensation paid to an employee for services, including salary, hourly pay, and certain taxable benefits. Employers generally report wages on Form W-2.
Wash sale
DefinitionA sale of stock or securities at a loss followed by acquisition of substantially identical property within the period set by law. The loss is generally disallowed at that time and added to the basis of replacement property.
Washington excise tax return
DefinitionThe return businesses use to report applicable Washington taxes, such as B&O, retail sales, use, and other excise taxes. Filing frequency depends on the Department of Revenue account.
Washington Working Families Tax Credit
DefinitionA refundable Washington credit for eligible individuals and families who meet income, residency, identification, and federal credit-related requirements. Eligibility and amounts depend on current state law.
Withholding
DefinitionTax taken from a payment and sent to a taxing authority on the recipient’s behalf. Common examples include federal income tax withheld from wages and backup withholding on certain payments.
This glossary provides general educational definitions. Tax rules can vary by facts and circumstances; consult a qualified professional for advice about your situation.