October 1, 2018

Glossary

Glossary

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There are 25 names in this directory beginning with the letter E.
Early Withdrawal
The removal of funds from a fixed-rate investment before the maturity date or from a tax-deferred investment account before a predetermined time.

Earned Income
The sum of income pertaining to wages, salaries, tips, self-employed net earnings and any other income received for personal services.

Earned Income Credit
A refundable tax credit low-income workers can file for, even if no income tax was withheld from the worker's pay.

Electronic Banking
Computerized network services that allow bank account holders to securely access their accounts on the internet.

Electronic Commerce (E-Commerce)
The use of the internet to conduct business and buy or sell goods and services.

Electronic Filing (IRS e-file)
IRS e-file options allow you to file federal income tax returns, and some state returns, through a tax professional, through your home computer or even through your telephone. It may also be available in many other places in your local community.

Electronic Funds Transfer System (EFTS)
A process by which funds are electronically transferred between accounts. EFTS allows for direct deposits or withdrawals without processing written checks.

Employee Retirement Income Security Act (ERISA)
A 1974 law establishing government oversight and federal limitations for pension and retirement plans.

Employee Stock Ownership Plan (ESOP)
An employer-sponsored program that encourages employees to purchase shares in the company they work for and possibly participate in management.

Endowment
Assets, funds or property donated to an individual, organization or group to be used as a source of income.

Engagement Letter
Written communication between an accountant and a client with respect to a professional engagement, outlining the scope of the accountant's responsibilities and arrangements agreed upon.

Enrolled Agent
A federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.

Equity
Anything that represents ownership interests, such as stock in a company. Equity can also refer to the difference between an asset's current market value and the debt against it.

Equity Loan
A loan that allows a homeowner to borrow against the accumulated equity in his or her home.

Escrow
A third-party agent, or account, that assumes possession of a contract, a deed or money from a grantor until all outstanding obligations or commitments are complete. Upon completion of these obligations, the property held in escrow is delivered to the grantee.

Estate
Real and personal property owned by a person at the time of death. Real property is land and anything permanently attached to it.

Estate Planning
The process of determining the disposition of a person's assets after death.

Estate Taxes
Federal or state taxes levied on the assets of a person who dies, paid by the decedent's estate rather than by the heirs.

Excess Compensation
The amount above the specified amount upon which calculations for future benefits are based in a pension plan integrated with federal old-age, survivors' and disability insurance (OASDI).

Excise Tax
Excise taxes are taxes on the sale or use of certain products or transactions.

Executor
The person who is named in a will to administer the distribution of the deceased's assets.

Exempt (from tax liability)
Before a taxpayer pays taxes, he or she can claim a set amount of tax deductions for him or herself, a spouse and eligible dependents. The total amount is subtracted from the adjusted gross income before the tax on the remaining income is figured out.

Exempt (from withholding)
A taxpayer can be exempt from paying a certain amount of federal income tax if they meet certain income, tax liability and dependency requirements.

Expenditure
Consumption of an asset or payment for an expense.

External Auditor
An independent accountant engaged to determine if the financial statements of an entity represent the economic events that occurred during the period audited. The external audit is for the shareholders and owners, rather than for management.