Industry Related Definitions
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M
Main Home
Regular,
permanent place of abode.
Margin
A
percentage of the full price of a security that must be paid as a down
payment by an investor buying on credit. The required margin
fluctuates subject to federal regulations.
Married Filing Jointly
The filing
status used by a couple who are married at the end of the tax year and
not legally separated under a final decree of divorce or separate
maintenance and who record total income, exemptions, and deductions of
both spouses on one tax return.
Married Filing Separately
The filing
status used by a married couple who choose to record their respective
incomes, exemptions, and deductions on separate individual tax
returns.
Material Participation Income
Active
income, as distinguished from passive income, from employment as well
as business and other for-profit activities in which the taxpayer
takes a significant and active role.
Medical Expenses
Qualified
medical expenses of an individual, spouse, and dependents are allowed
as an itemized deduction to the extent that such amounts (less
reimbursements) exceed 7.5 percent of adjusted gross income.
Medicare Tips
Tips
reported to an employer by a tipped employee. Such tips are subject to
Medicare withholding.
Medicare Wages
Total wages paid to an employee that are subject to Medicare tax. This
amount doesn't include tips, which are reported separately.
Mileage Rate (Optional Method)
The method
of deducting automobile expenses based on business miles driven. For
1999, two rates apply: the rate is 32.5 cents per mile for the period
January 1-March 31; the rate is 31 cents per mile for the period April
1-December 31.
Modified AGI (Adoption Credit)
For
purposes of computing the adoption credit, modified adjusted gross
income is regular AGI plus: (1) any foreign earned income exclusion,
(2) any foreign housing exclusion or deduction, and (3) any exclusion
of income from U.S. possessions and Puerto Rico.
Modified AGI (Child Tax Credit)
For
purposes of computing the child tax credit, modified adjusted gross
income is regular AGI minus any excluded foreign, U.S. possession, or
Puerto Rican income.
Modified AGI (Earned Income Credit)
For
purposes of computing the earned income credit for most taxpayers,
modified AGI is regular AGI without regard to any excess of capital
losses over capital gains; net loss from estates and trusts; net loss
from nonbusiness rents and royalties; and 75 percent of any net loss
from businesses computed separately with respect to (1) nonfarm
businesses conducted as a sole proprietor, (2) farm businesses
conducted as a sole proprietor, and (3) other trades or businesses
(not including income as an employee).
Modified AGI (Social Security)
For
purposes of determining the taxable portion (if any) of social
security or Railroad Retirement benefits, modified AGI is the sum of
AGI plus (1) tax-exempt or excluded interest, and (2) any amounts
exempted or excluded for foreign earned income, foreign housing,
American Samoan income, or Puerto Rican income.
Mortgage Credit Certificate
Qualified
taxpayers who receive a mortgage credit certificate from a state or
local government to buy, rehabilitate, or improve their main homes may
claim a credit for a percentage of their home mortgage interest. The
percentage is set by the government and ranges from 10 to 50 percent.
If the percentage exceeds 20 percent, the maximum credit is $2,000 per
year. The itemized deduction for home mortgage interest must be
reduced by the amount of the credit. The credit is not refundable, but
any portion that is unused because it exceeds tax liability may be
carried over to the following three years where it can be added to any
credit for the current year. The credit is computed on Form 8396.
Mortgage credit certificates may be subject to a recapture rule if the
home is sold within nine years.
Moving Expenses
An
adjustment to income permitted to employees and self-employed
individuals who move for work-related reasons, providing certain
requirements are met. Form 3903 is used to compute deductible moving
expenses.
Multiple Support Agreement
If two or
more persons who would otherwise be entitled to an exemption for a
dependent, together furnish more than half the dependent's support
(but no one individual provides more than half), any one of them who
furnishes more than 10 percent of the support is entitled to the
exemption if all the others who furnished more than 10 percent of the
support file written declarations that they will not claim an
exemption for the individual for that taxable year. Form 2120 is used
for this purpose.
Mutual Fund
(1) An
open-ended investment company that invests money of its shareholders
in a usually diversified group of securities of other corporations.
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