Glossary

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Tax-loss harvesting

Tax-loss harvesting is the investing technique of selling depreciated securities to offset gains within a given tax year. This investment strategy can help lower your overall tax bill since your tax is paid on the net amount. The cumulative tax savings can make a real difference in your life,

Tax liability

In finance terms, a liability is a debt. It's an amount you are legally or contractually obligated to pay to another person, business or entity. A tax liability is an amount you have to pay to federal, state and local governments.

Tax credit

A tax credit is a dollar-for-dollar amount taxpayers claim on their tax return to reduce the income tax they owe. The government typically creates credits to encourage certain behavior among citizens or to provide support for certain types of situations.

Taxes

Taxes are the sum of money paid to the government to collectively fund spending towards public goods and services. Taxes are used to fund things like schools, roads, and various public programs, such as Social Security and Medicare.

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Recent Terms

SEP IRA
A SEP IRA — short for simplified employee pension plan — is a tax-advantaged retirement plan designed for business owners. While it can be used by businesses of any size, it’s often used by small business owners and self-employed individuals.
High earner, not yet rich (HENRY)
HENRY is an acronym for "high earner, not yet rich." It is used to describe someone who earns a high income, usually between $100,000 to $500,000, but has not saved or invested enough to be considered rich. HENRYs typically spend a large portion of their earnings on expenses and purchases.
Non-deductible IRA
A non-deductible IRA is not a type of retirement account. Instead, it refers to non-deductible contributions made to a traditional retirement account. This retirement savings strategy is for those whose income exceeds the limits to make deductible IRA contributions or to contribute to a Roth IRA.