|Tax-deferred retirement plans|
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Definition of Tax-deferred retirement plans
Tax-deferred retirement plans
Employer-sponsored and other plans that allow contributions and earnings to
The ratio of net income to net sales.
Money after-tax rate of return minus the inflation rate.
A situation wherein participants in a transaction have different net tax rates.
taxes as a fraction of income; total taxes divided by total taxable income.
Total taxes owed divided by total income.
The ratio of net income before taxes to net sales.
The tax rate at which a party to a prospective transaction is indifferent between entering
Net income plus depreciation.
The formal name for the load of a back-end load fund.
The argument that double (corporate and individual) taxation of equity returns makes
Rate of return required on a par bond to produce the same after-tax yield to
That portion of the total income tax provision that is based on
A federal Act requiring employers to withhold income taxes from employee pay.
tax-advantaged life insurance product. deferred annuities offer deferral of taxes with the
An annuity providing for income payments to commence at a specified future time.
A provision that prohibits the company from calling the bond before a certain date. During this
pay related to current performance
A common term for convertible bonds because of their equity component and the
The most distant months of a futures contract. A bond that sells at a discount and does not
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Deferred nominal life annuity
A monthly fixed-dollar payment beginning at retirement age. It is nominal
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Deferred Tax Liability
Future tax obligation that results from the origination of a temporary
A non-cash expense that provides a source of free cash flow. Amount allocated during the
Depreciation tax shield
The value of the tax write-off on depreciation of plant and equipment.
depreciation tax shield
Reduction in taxes attributable to the depreciation allowance.
Agreement between two countries that taxes paid abroad can be offset against
earnings before interest and income tax (EBIT)
A measure of profit that
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
Effective Tax Rate
The total tax provision divided by pretax book income from continuing
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
Federal Unemployment Tax Act (FUTA)
A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
Imputation tax system
Arrangement by which investors who receive a dividend also receive a tax credit for
What the business paid to the IRS.
A government tax on the income earned by an individual or corporation.
Income Tax Expense
See income tax provision.
Income Tax Provision
The expense deduction from pretax book income reported on the
taxes paid by consumers when they buy goods and services. A sales tax is an example.
Individual Retirement Account
A personal savings account into which a defined
Individual Retirement Annuity
An IRA comprised of an annuity that is managed
The loss in purchasing power due to inflation eroding the real value of financial assets such as cash.
Defined benefit pension plans that are guaranteed by life insurance products. Related: noninsured plans
Insured Retirement Plan
This is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today."
Interest equalization tax
tax on foreign investment by residents of the U.S. which was abolished in 1974.
Interest tax shield
The reduction in income taxes that results from the tax-deductibility of interest payments.
interest tax shield
tax savings resulting from deductibility of interest payments.
Investment tax credit
Proportion of new capital investment that can be used to reduce a company's tax bill
Investment Tax Credit
A reduction in taxes offered to firms to induce them to increase investment spending.
Limited-tax general obligation bond
A general obligation bond that is limited as to revenue sources.
Margin Tax Rate
The tax rate applicable to the last unit of income.
Marginal tax rate
The tax rate that would have to be paid on any additional dollars of taxable income earned.
marginal tax rate
Additional taxes owed per dollar of additional income.
Marginal Tax Rate
Percent of an increase in income paid in tax.
Defined benefit pension plans that are not guaranteed by life insurance products. Related:
Nonqualified Retirement Plan
A pension plan that does not follow ERISA and
Payroll tax expense
The amount of tax associated with salaries that an employer pays to governments (federal, state, and local).
Payroll taxes payable
The amount of payroll taxes owed to the various governments at the end of a period.
Personal tax view (of capital structure)
The argument that the difference in personal tax rates between
Profit before interest and taxes (PBIT)
A tax in which the rich pay a larger percentage of income than the poor. Contrast with regressive tax.
Progressive tax system
A tax system wherein the average tax rate increases for some increases in income but
A tax taking the same percentage of income regardless of the level of income.
Qualified Retirement Plan
A retirement plan designed to observe all of the requirements
Registered Retirement Income Fund (Canada)
Commonly referred to as a RRIF, this is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income.
Registered Retirement Savings Plan (Canada)
Commonly referred to as an RRSP, this is a tax sheltered and tax deferred savings plan recognized by the Federal and Provincial tax authorities, whereby deposits are fully tax deductable in the year of deposit and fully taxable in the year of receipt. The ability to defer taxes on RRSP earnings allows one to save much faster than is ordinarily possible. The new rules which apply to RRSP's are that the holder of such a plan must convert it into income by the end of the year in which the holder turns age 69. The choices for conversion are to simply cash it in an pay full tax in the year of receipt, convert it to a RRIF and take a varying stream of income, paying tax on the amount received annually until the income is exhausted, or converting it into an annuity with guaranteed payments for a chosen number of years, again paying tax each year on moneys received.
A tax in which the poor pay a larger percentage of income than the rich. Contrast with progressive tax.
Roth IRA. An IRA account whose earnings are not taxable at all under certain
RRSP (Registered Retirement Savings Plan) (Canada)
A savings plan registered with Revenue Canada, which allows you to set aside a portion of your earned income now for use in the future. When you contribute to your RRSP, you are eligible to claim a tax deduction. However, cashing RRSPs at a later date will result in the payment of tax.
A tax levied as a percentage of retail sales.
Short-term tax exempts
Short-term securities issued by states, municipalities, local housing agencies, and
Single-premium deferred annuity
An insurance policy bought by the sponsor of a pension plan for a single
Split-rate tax system
A tax system that taxes retained earnings at a higher rate than earnings that are
Spousal Registered Retirement Savings Plan
This is an RRSP owned by the spouse of the person contributing to it. The contributor can direct up to 100% of eligible RRSP deposits into a spousal RRSP each and every year. Contributing to a spouses RRSP reduces the amount one can contribute to one's own RRSP, however, if the spouse is a lower income earner, it is an excellent way in which to split income for lower taxation in retirement years.
State Disability Tax
A tax charged by selected states to maintain a disability insurance
Statutory Tax Rate
The income tax rate that is stated in income tax law. It is applied to taxable
TANs (tax anticipation notes)
tax anticipation notes issued by states or municipalities to finance current
Tax anticipation bills (TABs)
Special bills that the Treasury occasionally issues that mature on corporate
tax benefit (of depreciation)
the amount of depreciation deductible for tax purposes multiplied by the tax rate;
Set of books kept by a firm's management for the IRS that follows IRS rules. The stockholder's
Tax clawback agreement
An agreement to contribute as equity to a project the value of all previously
postponing taxation of an amount until a future date
Tax deferral option
The feature of the U.S. Internal Revenue Code that the capital gains tax on an asset is
current compensation that is taxed at a future date
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
current compensation that is never taxed
The municipal bond market where state and local governments raise funds. Bonds issued
a tax treatment where income is never subject to income taxation
Tax free acquisition
A merger or consolidation in which 1) the acquirer's tax basis in each asset whose
A nation with a moderate level of taxation and/or liberal tax incentives for undertaking specific
Tax Reform Act of 1986
A 1986 law involving a major overhaul of the U.S. tax code.
Tax-Related Incomes Policy (TIP)
tax incentives for labor and business to induce them to conform to wage/price guidelines.
The reduction in income taxes that results from taking an allowable deduction from taxable income.
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