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The glossary behind
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Plain-English definitions of the terms your clients meet in a tax, retirement or business calculator, with the 2026 figures attached and the calculators that use them.

By topic

Business (4) · Compliance (5) · Investing (13) · Product (3) · Retirement (16) · Tax (21)

1

1031 exchange Tax
A 1031 exchange defers capital gains tax when investment or business real property is exchanged for like-kind real property. Strict deadlines apply: 45 calendar days to identify, 1…

A

Additional Medicare Tax Tax
The Additional Medicare Tax is an extra Medicare tax on high wages and self-employment income: 0.9% on wages over $200,000 of wages for withholding purposes. Employers don't match …
Adjusted gross income Tax
Adjusted gross income (AGI) is total income minus above-the-line adjustments such as deductible IRA and HSA contributions, half of self-employment tax and student loan interest. Ma…
Asset location Investing
Asset location is placing investments in the account type where they're taxed most favorably: tax-inefficient assets such as bonds and REITs in tax-deferred accounts, and tax-effic…

B

Boot Tax
Boot is cash or non-like-kind property received in a 1031 exchange. It is taxable up to the amount of realized gain. Taking on less debt on the replacement property can also create…
Break-even point Business
The break-even point is the sales volume at which revenue covers all fixed and variable costs, with zero profit: fixed costs ÷ contribution margin per unit. Each unit beyond it add…

C

Catch-up contribution Retirement
Catch-up contributions let older savers contribute above the normal limit. For 2026: $8,000 extra to 401(k)-type plans at 50 and over, $11,250 at ages 60 to 63, and an IRA limit of…
Circular 230 Compliance
Circular 230 (31 CFR Part 10) is the Treasury regulation governing practice before the IRS by CPAs, attorneys, enrolled agents and others. It sets standards for written advice (§10…
Compound annual growth rate Investing
Compound annual growth rate (CAGR) is the steady yearly rate that takes a starting value to an ending value over a period: (end ÷ start)^(1 ÷ years) − 1. A 100% gain over 10 years …
Compound interest Investing
Compound interest is earning a return on both the original amount and previously earned returns. Over long periods it drives most investment growth, and it works against borrowers …
Contribution margin Business
Contribution margin is price minus variable cost per unit: what each sale contributes toward fixed costs and profit. The contribution margin ratio divides it by price; a 40% ratio …
Current ratio Business
The current ratio is current assets divided by current liabilities. Above 1 means short-term assets cover short-term obligations; lenders often look for 1.2 to 2, depending on the …

D

Discount rate Investing
A discount rate is the rate used to convert future cash flows into present value, usually the return available on an investment of similar risk. The higher the rate, the less futur…

E

Early withdrawal penalty Retirement
The early withdrawal penalty is an additional tax on distributions from retirement accounts taken too early: 10% before age 59½ (age-55 separation-from-service exception for plans)…
Earned income credit Tax
The earned income credit (EITC) is a refundable federal credit for low- and moderate-income workers, based on earned income, AGI, filing status and qualifying children. It phases i…
Effective tax rate Tax
The effective tax rate is total tax divided by income, the average rate paid across all brackets. Because lower layers of income are taxed at lower rates, it is always below the ma…
Elective deferral Retirement
An elective deferral is the part of salary an employee chooses to contribute to a 401(k), 403(b) or governmental 457(b) plan, pre-tax or Roth. The 2026 limit is $24,500, with catch…
Employer match Retirement
An employer match is the contribution an employer adds to a workplace retirement plan based on what the employee defers, such as 50% of deferrals up to 6% of pay. It doesn't count …
Estate tax exclusion Tax
The estate tax exclusion is the amount a person can pass at death, combined with lifetime taxable gifts, free of federal estate tax: $15,000,000 ($30,000,000 for a married couple u…
Expense ratio Investing
An expense ratio is a fund's annual operating cost as a percentage of assets, deducted from returns. Over decades even 1% compounds into a large share of the ending value.…

F

FICA Tax
FICA is the Federal Insurance Contributions Act tax that funds Social Security and Medicare, withheld from wages: 6.2% Social Security + 1.45% Medicare (7.65%). Employers pay a mat…
Flexible spending account Tax
A flexible spending account (FSA) lets employees set aside pre-tax pay for eligible health or dependent care costs, saving income tax and FICA. 2026 limits are $3,400 for health FS…
Full retirement age Retirement
Full retirement age is when a worker can claim their full Social Security benefit, the primary insurance amount: 67 for those born in 1960 or later. Claiming earlier reduces the be…
Future value Investing
Future value is what an amount, plus any regular deposits, grows to at an assumed rate over a period. $10,000 at 6% compounded yearly is about $17,908 after 10 years. It's the arit…

H

Health savings account Tax
A health savings account (HSA) is a tax-advantaged account for people with HSA-eligible high-deductible health plans. Contributions are deductible, growth is tax-free and qualified…
High-deductible health plan Tax
A high-deductible health plan (HDHP) is health coverage meeting IRS minimum deductible and maximum out-of-pocket rules, which makes the enrollee eligible to contribute to an HSA. P…
Hypothetical performance Compliance
Hypothetical performance is performance results not actually achieved by a portfolio, including model results, backtests and projections. Under the SEC Marketing Rule, advisers mus…

I

Internal rate of return Investing
Internal rate of return (IRR) is the discount rate at which the present value of an investment's cash flows, including the initial outlay and any sale value, equals zero. It's the …
Investment analysis tool Compliance
An investment analysis tool is an interactive technological tool that produces simulations of investment outcomes. FINRA Rule 2214 allows broker-dealers to offer them with specific…
IRC §7216 Compliance
IRC §7216 makes it a crime for tax return preparers to knowingly or recklessly use or disclose tax return information without consent, outside permitted purposes. Treasury regulati…
Itemized deductions Tax
Itemized deductions are specific expenses, such as mortgage interest, state and local taxes up to a cap and charitable gifts, that taxpayers can deduct instead of the standard dedu…

L

Lead capture Product
Lead capture is an optional form on a calculator that lets a visitor send their contact details, inputs and results to the firm. Each submission becomes a contact record, is emaile…
Long-term capital gains Investing
Long-term capital gains are profits on assets held more than one year, taxed at preferential federal rates: 0%, 15% or 20% depending on income. Short-term gains are taxed as ordina…

M

Marginal tax rate Tax
The marginal tax rate is the rate applied to the next dollar of taxable income, the top bracket a taxpayer's income reaches. It is the right rate for valuing a deduction, a bonus o…

N

Net investment income tax Tax
The net investment income tax (NIIT) is a 3.8% federal surtax on investment income such as interest, dividends, capital gains and rents for taxpayers with modified AGI above set th…
Net unrealized appreciation Retirement
Net unrealized appreciation (NUA) is the growth in value of employer stock held in a workplace plan above its cost basis. Distributed in kind as part of a qualifying lump sum, the …

P

Portability Tax
Portability lets a surviving spouse use the deceased spouse's unused federal estate tax exclusion, if the executor elects it on a timely estate tax return. It can double the amount…
Present value Investing
Present value is today's worth of a future amount, found by discounting it at a rate of return. It underpins pension, lump-sum, lease and valuation decisions. Higher discount rates…
Primary insurance amount Retirement
The primary insurance amount (PIA) is the monthly Social Security benefit payable at full retirement age, calculated from average indexed monthly earnings using bend points: $1,286…
Provisional income Retirement
Provisional income is the IRS measure that decides how much Social Security is taxable: other income plus tax-exempt interest plus half of benefits. Compared with fixed thresholds,…

Q

Qualified charitable distribution Retirement
A qualified charitable distribution (QCD) is a direct transfer from an IRA to a qualifying charity by an owner aged 70½ or older. It counts toward the RMD but isn't included in tax…

R

Real return Investing
A real return is the return after inflation, roughly the nominal return minus the inflation rate. A 5% return with 3% inflation is about a 2% real return. After-tax real returns on…
Required beginning date Retirement
The required beginning date is the deadline for a retirement account owner's first required minimum distribution: April 1 of the year after they reach their RMD starting age. Later…
Required minimum distribution Retirement
A required minimum distribution (RMD) is the smallest amount the owner of a traditional IRA or workplace retirement plan must withdraw each year once they reach the starting age, f…
Roth conversion Retirement
A Roth conversion moves money from a pre-tax IRA or plan into a Roth account, paying income tax on the converted amount now in exchange for tax-free qualified withdrawals later. Co…
Rule of 72 Investing
The rule of 72 estimates how many years it takes money to double: 72 divided by the annual rate. At 8%, about 9 years. It's most accurate near 8% and works for inflation and debt t…

S

SEC Marketing Rule Compliance
The SEC Marketing Rule (Rule 206(4)-1 under the Investment Advisers Act, compliance date November 4, 2022) governs advertisements by SEC-registered investment advisers, including t…
Section 199A deduction Tax
The Section 199A deduction lets eligible taxpayers deduct part of qualified business income and qualified REIT dividends. For REIT dividends it is 20%, made permanent by the 2025 t…
Self-employment tax Tax
Self-employment tax is the Social Security and Medicare tax paid by the self-employed on net earnings: 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of net profit. Half i…
Social Security wage base Tax
The Social Security wage base is the maximum amount of earnings subject to Social Security tax in a year: $184,500 for 2026. Wages above it owe only Medicare tax, so high earners s…
Standard deduction Tax
The standard deduction is a fixed amount, set by filing status and indexed annually, that taxpayers may subtract from AGI instead of itemizing. Most households take it; itemizing o…
Substantially equal periodic payments Retirement
Substantially equal periodic payments (SEPP), under IRC §72(t), let account owners take penalty-free withdrawals before 59½ by following an IRS-approved schedule: Payments run 5 ye…

T

Tax bracket Tax
A tax bracket is a range of taxable income taxed at one rate. Federal brackets are set by filing status and indexed annually; for 2026 they follow IRS Rev. Proc. 2025-32 as amended…
Tax-deferred Investing
Tax-deferred means investment growth isn't taxed each year; tax is paid later, usually when money is withdrawn. Traditional IRAs, 401(k)s and annuities are tax-deferred. Deferral l…
Tax-equivalent yield Investing
Tax-equivalent yield is the taxable yield needed to match a tax-free yield after tax: tax-free yield ÷ (1 − tax rate). A 3.5% muni yield at a 24% rate equals about 4.61% taxable.…
Taxable income Tax
Taxable income is the amount federal income tax brackets apply to: adjusted gross income minus the standard deduction or itemized deductions (and certain other deductions). It is u…
Ten-year rule Retirement
The ten-year rule requires most non-spouse beneficiaries who inherit a retirement account after 2019 to empty it by the end of the tenth year after the owner's death. If the owner …

U

Uniform Lifetime Table Retirement
The Uniform Lifetime Table is the IRS table of distribution periods most retirement account owners use to calculate their required minimum distribution. Each age has a divisor; the…

W

Webhook Product
A webhook is an automatic message one system sends to another when something happens. On NumbersForClients, each new calculator lead can be sent as JSON to a URL you choose, such a…
White-label Product
White-label means the calculators show only the firm's brand: no platform credit, the firm's colors and fonts, and on paid plans the option to serve calculators from the firm's own…
Withdrawal rate Retirement
A withdrawal rate is the first-year withdrawal as a percentage of a retirement portfolio, usually increased with inflation afterward. The often-quoted 4% rule is a historical guide…
Working capital Business
Working capital is current assets minus current liabilities: the cushion a business has to meet short-term obligations. Growing businesses often consume working capital as receivab…
FAQ

About this glossary

Showing 8 of 8

  • Who is this glossary written for?

    For accounting and advisory firms and the clients who use their calculators. Each entry defines the term in plain English, explains why it matters to a firm, and links to the calculators that use it.

  • Where do the figures in the definitions come from?

    Every statutory figure comes from our 2026 tax figures table, with its tax year and IRS or SSA source. The calculators use the same table.

  • Can clients see these definitions inside the calculators?

    Yes. Each calculator has a collapsible Definitions block that explains its own terms, and you can edit or hide entries. This glossary is the longer reference.

  • How often is the glossary updated?

    When figures change each January, and whenever we add a calculator that introduces a new term.

  • Are the definitions tax or legal advice?

    No. They are general explanations. Applying them to a specific client is the firm's professional judgment.

  • Can we link to these definitions from our own site?

    Yes, linking is welcome. Copying the text wholesale is not; see our terms.

  • Which compliance terms are covered?

    Circular 230, the SEC Marketing Rule, hypothetical performance, investment analysis tools under FINRA Rule 2214, and IRC §7216, each written for firms that publish calculators.

  • What if a term is missing?

    Tell us through the contact form; we prioritize terms that appear in calculators.

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