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Tax Terms and Glossary: S

Schedule A - An IRS form for reporting itemized deductions, used to lower an individual’s IRS tax liability. The deductions are itemized rather than standard deductions, used when the itemized deductions are larger than the standard deductions.
Schedule C – IRS form attached to a taxpayer’s Form 1040 which reports the profit or loss from a business. The form shows the income and deductible expenses with the resulting net income/loss of the business being added or subtracted from the taxpayer’s gross income. You are required to pay half of you self employment tax if you have a schedule C since you are self-employed.
Schedule D - IRS income tax form which reports the realized gains or losses from a taxpayer’s sale of an asset. Taxpayers are required report their capital gains (or losses) from the sale of an asset of it differs from the purchase price; this allows the IRS to tax any profit from investments.
Schedule E – IRS Form for reporting profit or loss from an estate, trust, rental, royalties, an S-corporation, or partnership.
Schedule K-1 – An IRS form for shareholders in a partnership or S corporation which reports the individual’s share of the business profit, loss, expenses and tax credits.
S-Corporation – A corporation with fewer than 75 shareholders that allows the company to pass its profits and losses through to its shareholders much like a partnership, and does not pay taxes directly to the IRS. The S-corporation also provides the limited liability coverage of a corporation to its shareholders, and still is not double taxed as a corporation.
Secured Loan – A loan which the borrower pledges an asset as collateral for the loan, is a secured loan.
Self Employment Tax – Social Security tax and Medicare tax paid by self employed individuals which is contributed to their coverage under the social security system. A self employed individual must pay self employment tax if they earn more than $400 from self employment work.
Self-Employment – An individual who works for themselves, decides their own schedule, and acquires jobs and sales themselves or is contracted by others to do work. A self employed individual is required to pay a self employment tax which covers tier share of Medicare and Social Security tax.
Short Term Periodic Payment OIC - Payment terms for an Offer in Compromises which requires the offer amount to be paid in full within 24 months of the date the IRS received the offer. When the offer is first filed, the fee and first payment is due; monthly payments must be made during the time which the IRS evaluates the offer. All fee’s and payments are non-refundable if the Offer is denied.
Single – IRS and state tax filing status for an unmarried individual who does not qualify for another filing status such as Head of Household.
Social Security Number – A nine-digit tax identification number provided by the federal government to all United States Citizens.
Sole Proprietorship – A business entity run by a single individual, with no legal separation between the owner and the business.
Status 53 – The IRS status for taxpayers who are in the Non-Collectible status, allowing them to not make payments on their debt, as well as halting all collection actions on their account. The IRS will go back to cases with a Status 53 on a frequent basis to determine if you and your family’s income are still under the Federal Standards of living expenses. The penalties and interest will continue to accrue during your accounts status as Currently Non-Collectible.
Statute of Limitation – A legal time period set by the RIS or state for the collection, assessment, and refund request or to file bankruptcy. Currently the statute of limitations is 10 years for the IRS from the date of assessment. The statue of enforcement can be extended for a number of different reasons, including filing for bankruptcy.
Streamlined Installment Agreement – A Monthly payment plan to pay back your taxes with the IRS that does not require you to provide a detailed financial statement. A streamlined installment agreement does not require managerial approval like an installment agreement, making it a swift resolution. To qualify you must owe less than $25,000 in back taxes, and set a payment arrangement which satisfies the debt within 5 years, or within the time period left before the statute of limitations expires.
Subordination of Federal Tax Lien - Subordination allows a federal lien to be placed aside to let a lien in the following positions be transferred, refinanced, or sold. The IRS will only approve this if the subordination will assist the repayment of the tax debt, or close a delinquent account.
Substitute for Return (SFR) – The IRs is legally allowed to file your tax return for you, using the income reported under your social security number, while ignoring any deductions, dependants, or tax return. The IRS uses the amount to assess taxes against you, and if you fail to argue, respond or amend you tax returns that assessment becomes final, and theirs can collect on that assessment for 10 years.
Summons – Call by the IRS for a taxpayer or third party to appear or provide financial information and documentation relevant to an IRS tax case.
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