What Is “Bona fide residence test”?
06/02/2026
The bona fide residence test is an IRS standard used to determine whether a U.S. citizen or resident alien has established a genuine, long-term life in a foreign country. Unlike tests based strictly on counting calendar days, it evaluates your personal, social, and economic ties to prove that you are truly living abroad indefinitely. Passing
What Is a Beneficiary IRA?
06/02/2026
A Beneficiary IRA—commonly referred to as an Inherited IRA—is a unique account opened when a person inherits a traditional IRA, Roth IRA, or workplace retirement plan after the original owner passes away. Regulated strictly by the IRS, this account acts as a mandatory holding vessel to manage the distribution of the deceased person’s assets. Unlike
What Is the “BBA partnership audit regime”?
06/02/2026
The BBA partnership audit regime is a centralized set of IRS rules used to audit multi-member businesses. Under these rules, the IRS audits a partnership as a single entity and collects any owed taxes directly from the partnership itself. This replaces older, more complicated methods where the IRS had to track down and collect taxes
What Is Basis in an IRA?
06/02/2026
Basis in an IRA represents the total amount of after-tax money you have deposited into your Individual Retirement Account across your lifetime, minus any previous tax-free withdrawals of those funds. This metric serves as your official structural ledger within the IRS framework, distinguishing money you have already paid income tax on from your untaxed pre-tax
What Is a Backdoor Roth IRA?
06/02/2026
A Backdoor Roth IRA is not a specific type of retirement account, but rather a legal tax strategy used by high-earning taxpayers to bypass the strict IRS income limits that restrict direct contributions to a Roth IRA. The process involves making a non-deductible contribution to a traditional IRA and then immediately executing a Roth conversion
What Is “ Archer MSA ”?
06/02/2026
An Archer MSA (Medical Savings Account) is a legacy tax-advantaged personal savings account designed to help self-employed individuals and employees of small businesses pay for qualified medical expenses. Paired alongside an eligible High-Deductible Health Plan (HDHP), it allows account holders to grow funds entirely tax-free and make tax-free withdrawals for healthcare needs. While the program
What Is “Accumulated earnings tax”?
06/02/2026
The accumulated earnings tax is a penalty tax imposed by the IRS on C corporations that hold onto excessive amounts of profits instead of distributing them to shareholders as dividends. It is designed to prevent companies from hoarding cash simply to help their owners avoid paying personal income taxes on dividend payouts. The tax is
What Is “Accumulated earnings and profits”?
06/02/2026
Accumulated earnings and profits (often abbreviated as AE&P) is an IRS tax calculation that measures a corporation’s economic ability to pay dividends to its shareholders. Simply put, it is the running total of a C corporation’s lifetime net profits, minus any dividends it has already paid out and certain other tax adjustments. 1. Meaning of
What Is “ Accumulated adjustments account ”?
06/02/2026
The Accumulated Adjustments Account (AAA) is a special tax tracking tool used exclusively by S-corporations. It keeps a running total of the company’s profits that have already been taxed to the shareholders but have not yet been distributed to them as cash. By tracking this amount, the AAA ensures that business owners are not taxed
What Is the 60-Day Rollover Rule?
06/02/2026
The 60-day rollover rule is a strict IRS deadline that dictates how long you have to deposit a retirement account distribution into another tax-advantaged retirement plan to keep the transaction tax-free. It applies specifically to indirect rollovers, where a financial custodian or workplace plan cuts a distribution check directly to you instead of moving it