What Is “Covered expatriate”?
06/02/2026
A covered expatriate is a U.S. citizen or long-term green card holder who is officially designated by the IRS as subject to the U.S. expatriation tax rules upon giving up their citizenship or permanent residency. This status is triggered if the individual meets specific net worth, tax liability, or tax compliance thresholds on their exit
What Is “Corporate net operating loss”?
06/02/2026
A corporate net operating loss (NOL) happens when a C corporation’s allowable tax deductions are greater than its taxable income for the year. In simple terms, it means the business lost money from its core operations. The IRS allows companies to use this financial loss as a tax deduction to lower their corporate tax bills
What Is “Corporate income tax”?
06/02/2026
Corporate income tax is a tax levied by the government on the profits of a corporation. Instead of the business owners paying taxes on the company’s profit through their personal tax returns, the corporation itself acts as a separate taxpayer and pays the IRS directly. It is a major source of revenue for federal and
What Is “Corporate estimated tax”?
06/02/2026
Corporate estimated tax is the “pay-as-you-go” method used by corporations to pay their federal income tax liability throughout the year. If a C corporation expects to owe $500 or more in federal taxes for the year, the IRS requires the business to make four quarterly installment payments. Waiting to pay the entire tax bill at
What Is “Corporate distribution”?
06/02/2026
A corporate distribution is any payment of cash, stock, or property made by a corporation to its shareholders. It is the formal legal mechanism a business uses to pass its wealth or assets down to the people who own it. Depending on the company’s financial history, these distributions can be taxed as dividends, treated as
What Is a Contribution Limit?
06/02/2026
A contribution limit is the maximum amount of money you are legally allowed to deposit into a tax-advantaged account within a specific timeframe, usually a single calendar year. Established and regulated by the Internal Revenue Service (IRS), these caps apply to various savings vehicles including 401(k) plans, Individual Retirement Accounts (IRAs), and Health Savings Accounts
What Is “Consolidated tax return”?
06/02/2026
A consolidated tax return is a single federal income tax return filed by a parent corporation that includes the combined financial results of all its affiliated subsidiaries. Instead of each individual company filing its own separate tax return, the entire corporate family files as one single taxpaying entity. This strategy allows the corporate group to
What Is “Closer Connection Exception”?
06/02/2026
The closer connection exception is a U.S. tax rule that allows certain foreign citizens to avoid being treated as U.S. residents for tax purposes, even if they spent significant time in the United States. By proving they have deeper residential, economic, and personal ties to another country, they can protect their foreign income from U.S.
What Is a Catch-Up Contribution?
06/02/2026
A catch-up contribution is an additional, auxiliary deposit that the IRS allows older taxpayers to make into their tax-advantaged retirement accounts beyond the standard annual contribution limits. Available to individuals who reach age 50 or older by the end of the calendar year, this provision applies to popular savings plans like 401(k)s, 403(b)s, and Individual
What Is “Built-in gains tax”?
06/02/2026
The built-in gains tax is a special corporate-level tax applied to an S corporation that previously operated as a C corporation. It is triggered when the business sells assets that increased in value before the company switched to S corporation status. This tax ensures that companies cannot avoid paying corporate taxes on their growth simply