What Is “Expatriation tax”?
06/02/2026
The expatriation tax, commonly referred to as the “exit tax,” is a federal tax levied by the IRS on certain citizens and long-term green card holders who choose to give up their U.S. status. It treats your global assets as if they were sold for fair market value on the day before you expatriate, potentially
What Is “Exit tax”?
06/02/2026
The exit tax, formally known as the expatriation tax, is a federal tax levied by the IRS on certain citizens and long-term green card holders who choose to give up their U.S. legal status. It treats your global assets as if they were sold for fair market value on the day before you expatriate, potentially
What Is “Excess passive investment income”?
06/02/2026
Excess passive investment income is a tax rule that applies specifically to S corporations that previously operated as C corporations. It happens when a company holds onto leftover profits from its C corporation days and makes more than 25% of its total income from “hands-off” investments, like stocks or real estate. When this occurs, the
What Is “ Excess HSA contribution ”?
06/02/2026
An excess HSA contribution occurs when you deposit more money into your Health Savings Account than the annual maximum limit allowed by the IRS. It can also happen if you make contributions to an HSA during months when you were not enrolled in an eligible High-Deductible Health Plan (HDHP). If left uncorrected, this extra money
What Is an Excess Contribution?
06/02/2026
An excess contribution occurs when you deposit more money into a tax-advantaged account than the law legally allows for a single calendar year. This mistake can happen with popular accounts like Traditional IRAs, Roth IRAs, 401(k) plans, and Health Savings Accounts (HSAs). If you breach these IRS boundaries, the overcontributed amount loses its tax perks
What Is an Employer Nonelective Contribution?
06/02/2026
A an employer nonelective contribution is a retirement account deposit made by an employer directly into an eligible employee’s retirement plan, regardless of whether the employee contributes any of their own money. This automatic benefit is common in 401(k), 403(b), and SEP or SIMPLE IRA plans. Because it does not require an employee payroll deduction
What Is an Employer Matching Contribution?
06/02/2026
An employer matching contribution is additional money that an employer deposits into an employee’s workplace retirement account, such as a 401(k), 403(b), or SIMPLE IRA, based on the employee’s own elective deferrals. The employer matches the worker’s contributions up to a specific percentage or flat dollar cap outlined in the company’s plan documents. For the
What Is “Eligible S corporation shareholder”?
06/02/2026
An eligible S corporation shareholder is a person or specific type of entity that the IRS legally allows to own stock in an S corporation. Generally, this list is restricted to U.S. citizens, permanent residents (resident aliens), and certain domestic trusts or estates. If anyone outside of this approved list acquires even a single share
What Is an Elective Deferral?
06/02/2026
An elective deferral is a portion of your salary that you choose to take out of your regular paycheck to contribute directly to a workplace retirement plan, such as a 401(k), 403(b), or SIMPLE IRA. Instead of receiving this money as immediate cash in your checking account, you defer it to be invested for your
What Is “Earnings and profits”?
06/02/2026
Earnings and profits (often abbreviated as E&P) is an IRS tax calculation used to measure a corporation’s true economic ability to pay dividends to its shareholders. If a corporation has positive earnings and profits, any cash or property it distributes to its owners is generally taxed as a dividend. If the company has no E&P,