Glossary

A

• Abandonment

  

  The act of voluntarily and permanently giving up possession and use of property with the intention of ending ownership without transferring ownership to another person.

• Abode

  

  The taxpayer's home, habitation, residence, domicile, or place of dwelling.

• Academic Period

  

  A semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution.

• Accelerated Cost Recovery System (ACRS)

  

  The name given to tax rules relating to recovering, through depreciation deductions, the cost of property used in a trade or business to produce income.ACRS applies to property first used before 1987.

• Accelerated Death Benefits

  

  Any amounts paid under a life insurance contract, prior to death, for an individual who is terminally or chronically ill.

• Accountable Plan

  

  A reimbursement or allowance arrangement that requires an employee to account to their employer for their business expenses within a reasonable time.

• Accounting Method

  

  The way a taxpayer accounts for income and expenses.

• Active Conduct of Trade or Business

  

  Generally, to participate meaningfully in the management or operations of a trade or business.

• Advanced Premium Tax Credit (APTC)

  

  An equal portion of the estimated Premium Tax Credit for the taxpayer that is paid directly to the health insurance company from the Treasury Department to help reduce the taxpayer's out-of-pocket insurance costs.

• Affordable Care Act (ACA)

  

  Sometimes referred to as "Obamacare", the Affordable Care Act (ACA) is a federal law that requires all individuals to have health insurance beginning January 1, 2014.  The regulations include a tax credit to help pay the insurance premiums, a penalty for taxpayers who do not have insurance and do not qualify for an exception, and a penalty for large employers who do not offer affordable minimum essential coverage to their employees. Under tax reform the penalty is $0 for tax years 2019 - 2025.

• Applicable Taxpayer

  

  For ACA this is an individual whose household income is between 100% and 400% of the Federal Poverty Level, can claim their own exemption, and will not be filing a tax return using the married filing separately status.