Fair Market Value (FMV)
Fair market value is the price at which the property would change hands between a buyer and a seller, neither being forced to buy or sell and both having reasonable knowledge of all the relevant facts.
Federal Income Tax Withheld
Taxes withheld from your pay by your employer that the employer sends to the Internal Revenue Service. The amount taken out per pay period is based on the Form W-4, Employee’s Withholding Allowance Certificate, that you submitted to your employer. The total amount for the year is shown in Form W-2, Wage and Tax Statement, Box 2.
FICA (Federal Insurance Contributions Act)
The federal law that requires your employer to withhold Social Security and Medicare taxes from your wages.
Filing Status
You must determine your filing status before you can determine your filing requirements, standard deduction, and correct tax. You also use your filing status when determining whether you are eligible to claim certain deductions and credits. There are five filing statuses: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er) with Dependent Child. If more than one filing status applies to you, choose the one that will give you the lowest tax.
Fiscal Year
A regular fiscal year is a 12-month period that ends on the last day of any month except December. A 52-53 week fiscal year varies from 52 to 53 weeks and always ends on the same day of the week.
Foreign Tax Credit or Deduction
If you paid or accrued foreign taxes to a foreign country on foreign source income and are subject to U.S. tax on the same income, you may be able to take either a credit or an itemized deduction for those taxes. Taken as a deduction, foreign income taxes reduce your U.S. taxable income. Taken as a credit, foreign income taxes reduce your U.S. tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit.
Form 1040
The U.S. Individual Income Tax Return that must be filed when you do not qualify to use Form 1040EZ or Form 1040A. Form 1040 can be used to report all types of income, deductions, and credits.
Form 1040A
The U.S. Individual Income Tax Return that you may be able to use if you do not qualify to use Form 1040EZ. You can use this form if, among other requirements, your taxable income is less than $50,000 and you do not itemize deductions. You are only allowed to claim certain adjustments to income and credits.
Form 1040EZ
The Income Tax Return for Single and Joint Filers With No Dependents is the simplest individual income tax return to use. You can use this form if, among other requirements, you do not claim any dependents, adjustments to income, or itemized deductions; your taxable income is less than $50,000; you did not receive any Advance Earned Income Credit payments; and you do not claim any credits other than the Earned Income Credit.
Form 1040X
The Amended U.S. Individual Income Tax Return is used to correct a return that has already been filed. An amended tax return cannot be filed electronically using IRS e-file.
Form W-2
The Wage and Tax Statement is a statement from your employer of wages and other compensation paid to you and taxes withheld from your pay. Form W-2 shows total compensation and the income tax (federal, state, and local), Social Security tax, and Medicare tax that were withheld during the year. Other information, such as allocated tips and dependent care benefits, is also shown on the Form W-2.
Form W-4
The Employee’s Withholding Allowance Certificate is used to determine the correct amount of federal income tax an employer needs to withhold from your pay. A Form W-4 must be completed for every employer for whom you work. Form W-4 includes three types of information that an employer will use to calculate federal withholding: (1) whether to withhold at the single rate or at the lower married rate, (2) how many withholding allowances you claimed (each allowance reduces the amount withheld), and (3) whether you want an additional amount withheld.
Fringe Benefits
Noncash compensation or other benefits you receive from your employer.