If you own a business – or are thinking of starting one – you need to be aware of the tax ramifications of your endeavor. Business taxation carries its own set of rules and terms. Here are 15 common business tax terms that you should become familiar with, because you’ll be using them regularly:

Adjusted Gross Income (AGI) - The total of all the income you received over the course of the year such as wages, interest, dividends and capital gains minus things such as business expenses, contributions to a qualified IRA, moving expenses, alimony and capital losses. The adjusted gross income is used to calculate federal income tax due.

Accelerated depreciation - A bookkeeping method that allows an owner to deduct a greater portion of the cost of depreciated property in the years immediately after it is acquired.

Accounting method - The method used by a business or individual to keep records. Most individuals and small businesses use the Cash method, although businesses that maintain inventory are required to use the Accrual method.

Accrual method - Business accounting in which you report income in the year you earned it and expenses in the year you incur them, rather than reporting income and expenses when you receive payment or when you pay the expenses. If you own a business that maintains an inventory, you are required to use the Accrual method for tax purposes.

Business interest expense - Interest incurred in the operation of a business, deductible as a business expense.

Cafeteria plan - An arrangement whereby an employer offers workers a choice of nontaxable fringe benefits from which to select. The plan may be funded with employer contributions, employee contributions (usually through salary reduction agreements) or a combination of both. Also known as a Section 125 plan or a Flexible spending account.

Capital - Money that is used to make money; for example, to buy rental property or a business.

Cash method - The form of accounting in which you report income in the actual year you receive it and deduct expenses in the year you pay them.

Chapter 11 - A reorganization bankruptcy, usually involving a corporation or partnership. A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business and individuals can also file for Chapter 11.

Commingling - The mixing of money from different sources so that the sources can't be distinguished; for example, a business owner’s personal funds and business funds.

Depreciation - The gradual loss of value of a building or other property because of age or natural wear. With regard to taxes, this is the deduction you are allowed for the wearing away and expensing over time of such items as office equipment, vehicles, buildings and furniture. The IRS determines the amount of time such material is expected to last, and you depreciate, or spread the cost of, the asset over its estimated useful life rather than deducting the entire cost in the year that you acquired it.

Employer Identification Number - A nine-digit number assigned by the IRS for businesses, estates and trusts.

Estimated tax payments - Quarterly tax payments made to the IRS if the amount you pay through paycheck withholding is not enough to cover your annual tax liability. This method is generally is used by persons who receive income from sources other than paychecks, such as interest or dividend payments, business ownership or income from a second, freelance job.

Expensing - The method allowed under Tax Code Section 179 to claim an immediate deduction for the cost of business property.

Federal Unemployment Tax Act (FUTA) - The law under which employers pay tax to fund unemployment compensation programs.

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