Tax & accounting glossary.
The US tax and accounting terms you'll actually run into, explained simply by our CPA & EA team.
US tax and accounting come with a lot of jargon. Here are the terms you'll run into most often as a founder, freelancer or business owner, explained in plain English by our CPA & EA team.
Certified Public Accountant
A state-licensed accounting professional authorized to prepare and sign tax returns and represent clients before the IRS on any matter.
Enrolled Agent
A federally licensed tax practitioner with unlimited rights to represent any taxpayer before the IRS, in any state, the highest IRS credential.
Form 5472
An IRS information return required for US LLCs that are 25%+ foreign-owned. Missing or late filing carries a penalty starting at $25,000 per form.
Form 1120 / 1120-S
Form 1120 is the US corporate income tax return; 1120-S is the version for S-corporations, which pass income through to shareholders.
Form 1065
The US return for partnerships and multi-member LLCs; it reports income and issues each partner a Schedule K-1.
EIN
Employer Identification Number, a federal tax ID for your business. Non-residents can obtain one without a Social Security Number.
ITIN
Individual Taxpayer Identification Number, a tax ID for individuals who must file US taxes but aren't eligible for an SSN.
Sales-Tax Nexus
A connection to a US state, through sales volume, employees or inventory, that creates an obligation to collect and remit sales tax there.
US GAAP
Generally Accepted Accounting Principles, the standard framework for US financial statements, often required by investors and lenders.
BOI Report
Beneficial Ownership Information report filed with FinCEN, identifying the individuals who ultimately own or control a US company.
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