Tax terms that can help cover your assets

24 Mar

image After clearing off the kitchen table and finding an outlet for the calculator, I sat down to do my taxes. As always, I made sure to have all the necessary documentation and forms — W4s, tax forms, bank statements, insurance reports, tax schedules and, most importantly, a full box of Kleenex.

As I sat staring at this year’s tax booklet, I noticed a special section of “Tax Terms,” which is an alphabetical listing of terms one may encounter during the tax preparation process. Each term is followed by a brief description meant to enlighten the truth-seeking taxpayer through “real-life” examples. For instance, the IRS uses “Jane” and “John” to illustrate the term “Ability to Pay.” In this scenario, Jane is filthy rich, with homes on both coasts that she visits by way of her own Lear jet.

By comparison, John earns what the IRS calls a “more modest salary,” which…

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