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Tax on the profit made by selling an asset that has increased in value, such as stocks or property.
Capital Gains
An item that is subtracted from gross income on a tax return. There are many deductions, the most common of which include business expenses, charitable donations, medical expenses, property taxes, interest on mortgages or equity lines of credit, and tax advice.
Deduction
Income that is available after all necessities (food, shelter, etc.) have been paid for.
Discretionary Income
A tax is imposed on the sale of fuel.
Fuel Tax
The total income of an individual or couple filing jointly or separately, including all wages, rental income, and interest on investments (except tax-deferred investments).
Gross Income
A tax is imposed by the federal government on any money earned during a fiscal year.
Income Tax
A tax is imposed on the transfer of property from a deceased person.
Inheritance Tax
A form of taxation where people who earn more are charged a higher percentage of their income than people with lower incomes.
Progressive Taxes
A document by which a person regulates the rights of others over his or her property or family after death.
Will
A legal arrangement in which one person holds title to money or property, subject to an obligation to keep or use the property for the benefit of another.
Trust
A word that describes someone who dies without a legal will in place.
Intestate
All of the property, assets, and debts left by a deceased person.
Estate
A dollar-value threshold over which estate taxes are required.
Exemption Amount
A type of investment that guarantees payments of specific amounts at specific times. Annuities come in two forms: fixed and variable.
Annuity
A professionally managed investment vehicle that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.
Mutual Fund
A tax is imposed on transferring property and assets from a deceased person.
Inheritance Tax
To leave or give property by will.
Bequeath
Instructions covering specific medical directives as to the course of treatment to be taken by caregivers, or, in particular, in some cases forbidding treatment and sometimes also food and water, if the principal is unable to give informed consent due to incapacity.
Living Will
A company retirement plan, such as a pension plan, in which a retired employee receives a specific amount based on salary history and years of service, and in which the employer bears the investment risk.
Defined Benefit Plan
A rise in the general level of prices over time.
Inflation
A person tasked with carrying out the instructions laid out in the will. The executor's most common task is to guide the decedent's assets throughout the probate process. If there is no will, or if the choice does not name an executor, the probate or other court can appoint one.
Executor
The act of preparing for passing assets and decision-making responsibility on to heirs or other individuals in case of death or incapacitating injury or illness.
Estate Planning
The legal process of settling the estate of a deceased person, resolving all claims, and distributing the decedent's property. In some US states, after a person residing in that state has died without a valid will or trust, that person's property immediately becomes the property of the spouse, if any, without the need for probate.
Probate
A type of employer-sponsored defined contribution retirement plan under section 401(k) of the Internal Revenue Code. It allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of wages paid directly, or deferred, into a 401(k) account.
401(k)
A steady income is given to a person (usually after retirement). Most pensions are created by an employer for the benefit of an employee. Pensions are a form of deferred compensation, usually advantageous to the employee and employer for tax reasons.
Pension