Plain-English definitions for the terms you'll encounter on your financial journey.
A parallel tax system designed to ensure that higher-income taxpayers who benefit from specific exclusions, deductions, and credits pay at least a baseline amount of tax. It recalculates income tax under a different set of rules with fewer allowable deductions.
A technique that allows gifts to a trust to qualify for the annual gift tax exclusion by giving beneficiaries a limited time to withdraw funds.
A specific situation, condition, or type of loss that is explicitly not covered by an insurance policy.
The Foreign Earned Income Exclusion is a tax rule that allows Americans working in other countries to avoid paying U.S. taxes on a portion of the money they earn abroad. It is a way to prevent you from getting 'double-taxed' on the same paycheck by two different countries.
Annual Gift Tax Exclusion — The specific amount of money or value one person can give to another in a single year without having to report it to the IRS.