Tax Terms Glossary | Gain Power With Knowledge

Effectively Connected Income (ECI): Gross Income that is effectively connected to a trade or business that is within the United States.
Employee: A worker who performs a job while being controlled by their employer.
Employee Benefit Plan: An employee benefit plan includes an employee welfare benefit plan plan or an employee pension benefit plan. See 29 U.S.C. §1002(3).
Employee Pension Benefit Plan: An Employee pension benefit plan is established or maintained to provide to provide retirement income to employees, or provides tax deferral income to employees until their employment ceases, or beyond. See 29 U.S.C. §1002(2)(A).
Employee Welfare Benefit Plan: A plan that provides its participants with benefits in the event of sickness, accident, disability, vacation benefits, training programs, day care centers, scholarship funds, or prepaid legal services. See 29 U.S.C. §1002(1).
Employer: A person or entity who hires an employee or independent contractor to perform services.
Employee Identification Number (EIN): A number assigned to a business by the IRS.
Employee Stock Option: An option received by an employee to purchase shares of the company he works for.
Entity: An organization that is considered separate from its owners and can operate on its own behalf. Examples are corporations, partnerships, estates, and trusts.
Equitable Interest: The equitable interest is the interest of the beneficial owner. This may be a different person than the legal owner.
Estate: An estate is the total worth of a person at any point in time.
Estimated Tax Payments: These are payments made to a taxing authority throughout the tax year that are an estimate of taxes due. These payments are credits that will be refunded if there was an overpayment.
Exchange: The giving of one thing of value and the receiving another thing of value, in return, or exchange.
Excise Tax: A tax imposed on a good or service, often related to the quantity rather than the value.
Executor: A person named in a will to fulfill the decedent's wishes.
Exemptions (Tax): A taxable event on which no tax is levied, due to an exception from the tax rules.
Exercise (Option): An options exercise is where an option holder implements his/her right under an option and buys or sells the underlying security at the strike price.
Expatriate: A person who has left their native country to live abroad.
Expenses: An outflow of money that is paid to another person or entity and is currently deductible because it is not being used for the acquisition or improvement of a capital asset.
Expires (Option): The date on which an option no longer trades and is either exercised or lapses.
Extraordinary Dividend: A one-time distribution made by a corporation to its shareholders, which is usually cash, but sometimes other property or stock.