Common Tax Terms Explained (Boise CPA Glossary)
Tax terminology can feel overwhelming for small business owners, self-employed individuals, and S corporation shareholders. This glossary breaks down common tax, accounting, bookkeeping, and business finance terms in plain English.
Succentrix Business Advisors provides tax preparation, bookkeeping, accounting, and fractional CFO services throughout Boise and the Treasure Valley.
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Tax & Income Terms
Adjusted Gross Income (AGI)
Adjusted Gross Income is your total income after specific IRS adjustments are applied. It affects deductions, credits, and overall tax liability.
AGI is one of the most important numbers on your return because it determines eligibility for many tax benefits used in Boise tax preparation services.
Deduction
A tax deduction reduces taxable income. Common deductions include business expenses, retirement contributions, and certain state taxes.
Understanding deductions is essential for anyone using professional Boise tax preparation services to legally reduce tax liability.
Tax Credit
A tax credit directly reduces the amount of tax owed. Unlike deductions, credits reduce your final tax bill dollar-for-dollar.
Proper tax planning with a CPA can help identify credits available during Boise tax planning and preparation.
Estimated Tax Payments
Estimated tax payments are quarterly payments made toward expected annual tax liability. They are required for many self-employed individuals and small business owners.
If you operate a business in Boise, estimated taxes are often managed as part of ongoing tax planning services to avoid penalties and cash flow issues.
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Business Structure Terms
S Corporation
An S corporation is a tax election that allows business owners to split income between wages and distributions.
S corp planning is often used by business owners who work with a CPA for ongoing Boise tax strategy and advisory services.
LLC (Limited Liability Company)
An LLC is a legal structure that may be taxed as a sole proprietorship, partnership, or S corporation depending on IRS elections.
Choosing the right structure is a key part of business consulting and CPA advisory services in Boise.
Bookkeeping & Accounting Terms
Bookkeeping
Bookkeeping is the process of recording and organizing financial transactions such as income, expenses, and bank activity.
Accurate bookkeeping is the foundation of all Boise bookkeeping services, tax filings, and financial reporting.
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Cash Basis Accounting
Cash basis accounting records income when received and expenses when paid.
Many small businesses using Boise bookkeeping services rely on this method due to its simplicity.
Accrual Basis Accounting
Accrual accounting records income when earned and expenses when incurred.
It is commonly used in more advanced Boise accounting services for businesses that need accurate financial reporting.
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Financial Statements
Financial statements summarize business performance including profit and loss, balance sheet, and cash flow reports.
These reports are typically prepared through professional accounting services in Boise to support decision-making and tax compliance.
Cash Flow
Cash flow refers to the movement of money in and out of a business.
Poor cash flow management is one of the most common reasons business owners seek fractional CFO services in Boise.
Fractional CFO
A fractional CFO provides strategic financial leadership without the cost of a full-time executive.
This includes forecasting, budgeting, KPI tracking, and profitability analysis for growing Boise businesses.
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IRS & Compliance Terms
IRS Notice
An IRS notice is an official letter about your tax return, balance due, or account changes.
These situations are often resolved through professional CPA tax support services in Boise.
Tax Refund
A tax refund occurs when payments exceed tax liability.
Proper filing through Boise tax preparation services helps ensure refunds are accurate and timely.
Tax Planning
Tax planning is the proactive process of reviewing income, deductions, and structure decisions before filing season.
It is one of the core services offered in Boise CPA advisory and tax planning services.
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