The plain-language dictionary of accounting & tax.

A reimbursement arrangement for employees, including S-corp owner-employees, that can keep valid business reimbursements out of taxable wages. It needs a business connection, timely support, and return of any excess advance.

The broader practice of turning financial activity into useful records, reports, tax filings, and decisions. Bookkeeping records what happened; accounting interprets and applies it.

Money your business owes to vendors, suppliers, lenders, or other parties for bills it has not paid yet. It usually appears as a liability.

Money customers owe your business for work already performed or goods already delivered. It is an asset until it is collected.

An accounting method that records income when it is earned and expenses when they are owed, even if cash moves later. It helps show which sales and bills belong to a period, not just what hit the bank.

A cost the business has incurred but has not paid yet, such as wages earned before payday or a bill received after month-end. Accrual accounting records it in the period it belongs to.

A vehicle deduction method based on actual business-use costs, such as fuel, repairs, insurance, lease payments, depreciation, or other allowed costs. It requires records and a business-use percentage.

A corrected tax return filed after the original return when information changes or an error needs to be fixed. Amended returns can affect federal and state filings.

Spreading the cost of an intangible asset, such as software, goodwill, or a loan fee, over the period it benefits the business. It is similar to depreciation, but for intangible items.

Something the business owns or controls that has value, such as cash, equipment, inventory, deposits, or money customers owe. Assets are one side of the balance sheet.

A snapshot of what the business owns, owes, and has left for owners at a specific point in time. The main sections are assets, liabilities, and equity.

The connection that brings bank or credit-card transactions into accounting software or Uplinq's review workflow. A bank feed is useful, but it still needs categorization and reconciliation.

The starting balance for an account when books begin, a new period opens, or historical records are imported. If the beginning balance is wrong, later reports can look wrong even if current transactions are clean.

A vendor request for payment. In accrual books, a bill can create an expense and an accounts-payable balance before cash is paid.

Time worked that can be billed to a client. It matters for revenue recognition, project profitability, and agency or professional-services reporting.

A tax rule that may allow a business to deduct a large portion of qualifying property sooner than regular depreciation. Eligibility and percentages change, so publish-year review is required.

Income as shown in the accounting records or financial statements. It can differ from taxable income because accounting rules and tax rules do not always match.

The difference between profit shown in the books and income calculated under tax rules. Timing differences, depreciation, meals, penalties, owner activity, and other items can create differences.

The day-to-day process of recording, categorizing, matching, and reconciling business transactions. Clean bookkeeping is the base layer for financial reports and tax filing.

A rental arrangement where a stylist, barber, or provider pays for use of space inside a salon or similar business. It can affect revenue, contractor classification, and sales-tax treatment depending on the state and arrangement.

How quickly a business is spending cash, often measured monthly. It is most useful when paired with cash runway and cash flow.

A cost that is connected to running or earning income for the business. For tax purposes, it generally needs a real business purpose and support showing what it was for.

A business expense helps run or earn income for the business; a personal expense benefits the owner personally. If spending is mixed, Uplinq needs context and support so profit and deductions are not overstated.

A corporation taxed as a separate entity from its owners. Profits may be taxed at the corporate level and again when distributed as dividends.

A bigger purchase that should benefit the business for more than a short period, such as equipment, furniture, vehicles, or certain improvements. Instead of being treated like an everyday expense, it may be recorded as an asset and depreciated.

An accounting method that records income when cash is received and expenses when cash is paid. It is simple, but it can miss unpaid bills, open invoices, and other timing issues.

The movement of cash in and out of the business. A company can show a profit and still be tight on cash if customers pay late, debt payments are high, inventory is growing, or owners take money out.

A report showing cash generated or used by operations, investing, and financing activities. It explains why cash changed during a period.

How long the business can keep operating at its current cash burn rate before it runs out of available cash. It is most useful for growth businesses and seasonal businesses watching cash reserves.

Cleanup work that brings past months or years of books up to date. It often involves missing statements, uncategorized transactions, opening balances, and reconciliation gaps.

A reversal initiated through a card network or payment processor after a customer disputes a payment. Chargebacks can affect sales, fees, refunds, and receivables.

The organized list of categories your books use to classify transactions. A clean chart of accounts makes reports easier to read and tax prep easier to support.

The process of finishing a period so the transactions are categorized, reconciled, reviewed, and ready for reports or tax work. For many small businesses, this happens monthly and again at year-end.

Cost of goods sold: the direct costs tied to products or services sold. Revenue minus COGS equals gross profit.

Free or discounted food, drinks, products, or services given to customers, staff, or guests. Comps should be tracked so revenue, cost, and tax treatment are not confused.

A non-employee worker who operates independently and is paid for services. The label alone does not decide classification; the facts of the relationship matter.

Money or property an owner puts into the business. It is not revenue; it is usually recorded in equity or as part of an owner-loan arrangement depending on intent and documentation.

The tax starting point for measuring gain, loss, depreciation, or recapture on an asset or ownership interest. Basis can change over time through improvements, depreciation, contributions, distributions, and other adjustments.

A tax strategy that identifies components of real property that may be depreciated over shorter lives than the building itself. It is specialized and should be reviewed before relying on it.

In bookkeeping, a credit is one side of an accounting entry. It is not the same thing as a credit-card credit or a bank deposit; it only makes sense together with the matching debit.

Assets expected to turn into cash or be used within a short period, such as cash, accounts receivable, inventory, or short-term deposits.

Obligations expected to be paid within a short period, such as accounts payable, credit-card balances, payroll liabilities, and sales tax payable.

Money collected from a customer before goods or services are fully delivered. Depending on the facts and accounting method, it may be deferred revenue until earned.

A tax election that can allow certain lower-cost tangible property purchases to be expensed instead of capitalized. The rules depend on documentation, policy, and current IRS limits.

In bookkeeping, a debit is one side of an accounting entry. It is not automatically "good" or "bad"; every debit has a matching credit somewhere else in the books.

An expense or tax item that reduces taxable income when allowed by tax rules. Not every cash outflow is a deduction.

Money collected before the business has earned it. It is usually a liability until the business delivers the product or service.

Spreading the cost of a long-lived physical asset over the years it is used. Depreciation helps match the cost of an asset to the periods that benefit from it.

Taxable income that can arise when property that was depreciated is sold. It matters for real estate, vehicles, equipment, and other business assets.

A reduction from the normal sales price. Discounts should be recorded consistently so gross sales, net sales, margins, and sales-tax reporting stay clear.

Money or property paid out to an owner from a pass-through business, such as a partnership or S-corp. It is different from payroll wages and usually does not reduce business profit like a normal expense.

The accounting system where every transaction affects at least two accounts. This is what keeps the books in balance.

Intercompany balances used when one company pays another company's bill or money moves between related entities. One side records what is owed; the other records what is receivable.

Earnings before interest, taxes, depreciation, and amortization. It is a rough measure of operating profitability, but it does not replace cash flow or net income.

A sales-tax connection created by enough sales activity into a state, even if the business has no office, employee, or inventory there. Thresholds and measurement periods vary by state.

Employer Identification Number: the federal tax ID for a business. It is used for payroll, bank accounts, tax filings, and certain information returns.

A worker-classification distinction based on behavioral control, financial control, and the relationship between the business and worker. Misclassification can create payroll tax and compliance problems.

How a business is treated for tax purposes. Legal structure and tax classification are related, but they are not always the same thing.

The owner's residual stake after liabilities are subtracted from assets. Owner contributions, draws, distributions, and retained earnings all affect equity.

A document a buyer gives a seller to support a sales-tax exemption, such as resale or exempt organization status. Sellers need to keep certificates on file.

A cost the business incurs to operate or earn revenue. Some expenses reduce profit immediately, while capital purchases may be treated differently.

Social Security and Medicare taxes tied to wages. Employees and employers generally share FICA through payroll.

The year-end process of finalizing books, answering tax questions, and collecting documents before a return can be prepared. It is preparation for filing, not the filing itself.

The main reports that summarize business performance and financial position. For small businesses, this usually means the profit and loss, balance sheet, and cash flow statement.

A 12-month tax or reporting year that does not necessarily match the calendar year. Some entities use a fiscal year based on their business cycle or tax status.

A long-term physical item the business uses, such as equipment, vehicles, furniture, or machinery. Fixed assets are usually capitalized and depreciated over time.

The cost of ingredients and food inventory used to create menu items. It is a key margin measure for restaurants.

The individual income tax return. Many small business owners report business results or pass-through income on or alongside their personal return.

The partnership tax return. Partnerships and many multi-member LLCs use it to report business activity and issue K-1s to partners.

The C-corporation income tax return. A C-corp is taxed separately from its owners.

The S-corporation tax return. It reports S-corp activity and produces K-1s for shareholders.

An added customer charge intended to offset fuel costs. It should be recorded consistently so revenue, taxable sales, and job profitability remain clear.

Federal unemployment tax paid by employers under federal rules. It is part of payroll compliance and is separate from employee withholding.

The full record of a business's financial activity, organized by account. It is the source that reports, tax prep, and reconciliations tie back to.

Customer prepayments for future goods or services. They are often recorded as a liability until redeemed, and unredeemed balances can have accounting and state-law considerations.

Gross profit expressed as a percentage of revenue. It helps show whether pricing and direct costs leave enough room to cover overhead.

Revenue minus cost of goods sold. It shows what is left after direct production or resale costs, before overhead expenses.

Total customer sales before subtracting refunds, discounts, or processor fees. Gross sales are often higher than the net cash deposit from Stripe, Square, Shopify, Toast, or a marketplace.

A payment to a partner for services or capital that is treated differently from a normal profit distribution. It is common in partnership tax reporting.

A deduction for part of home costs when a space is used regularly and exclusively for business. The calculation can use actual expenses or a simplified method, but eligibility depends on the facts.

A non-physical asset with value, such as software, goodwill, trademarks, or certain contract rights. Some intangible assets are amortized instead of depreciated.

A transaction between businesses with common ownership or a related relationship. These need careful treatment so each entity's books stay separate and accurate.

The cost of borrowing money. In a loan payment, only the interest portion is usually an expense; principal reduces the loan balance.

Goods held for sale or materials used to produce goods for sale. Inventory is usually an asset until sold, then it becomes part of cost of goods sold.

The difference between inventory records and actual inventory on hand due to theft, damage, waste, spoilage, or counting errors. Shrinkage affects COGS and profit.

A request for payment sent to a customer after goods or services are delivered, or according to a contract or billing schedule. In accrual books, invoices can create accounts receivable before cash is collected.

A letter from a tax authority about a return, payment, balance, information mismatch, or request for more information. Notices should be uploaded or shared quickly so the response deadline is not missed.

Tracking income and costs by job, project, property, or client. It helps owners understand which work is profitable.

A manual accounting entry that records debits and credits outside the normal bank-feed flow. Journal entries are often used for payroll, depreciation, corrections, and closing adjustments.

A tax form that reports a partner's, shareholder's, or beneficiary's share of income, deductions, credits, and other items. K-1s often feed into an owner's personal return.

A decision about whether to rent or own equipment, vehicles, or property. The bookkeeping and tax treatment can differ based on the contract and use.

Something the business owes, such as loans, credit-card balances, unpaid bills, payroll taxes, or deferred revenue. Liabilities appear on the balance sheet.

Limited liability company, a flexible legal structure that can be taxed in different ways depending on ownership and elections. An LLC is not automatically an S-corp.

Borrowed money that the business is expected to repay. Payments usually need to be split between principal, interest, fees, and sometimes escrow or other charges.

The portion of a loan payment that pays down the amount borrowed. It reduces a liability and is not treated as a profit-and-loss expense.

A marketplace platform that may be responsible for collecting and remitting sales tax on certain marketplace sales. Sellers still need records showing what the marketplace collected, remitted, refunded, or left to the seller.

A deposit from platforms such as Amazon, Etsy, DoorDash, Uber, Airbnb, or other marketplaces. The payout can combine sales, fees, refunds, tax collected, reserves, and adjustments.

A bank deposit from Stripe, Square, Shopify, Toast, or another payment processor. The deposit is often the net amount after fees, refunds, tips, sales tax, chargebacks, or reserves, so Uplinq often needs the processor report too.

A vehicle deduction method based on business miles driven, not commuting or personal miles. It needs a reliable mileage log or other support.

The recurring review that finishes a month of bookkeeping: categorize transactions, reconcile accounts, review unusual items, and prepare reports.

Funds held by a lender for property taxes, insurance, or similar costs. Mortgage payments may need to be split between principal, interest, escrow, and fees.

Sales-tax filing across more than one state. It can require separate registrations, returns, due dates, and local tax treatment.

Profit after revenue, cost of goods sold, operating expenses, interest, taxes, and other items are included. It is often called the bottom line.

Sales after returns, allowances, discounts, and similar reductions. Net sales are different from gross sales and from the cash deposited by a processor.

A connection to a state that can create a sales-tax obligation. It can come from physical presence, sales volume, inventory, employees, or other state-specific facts.

Payroll paid to an owner or officer who must be treated as an employee, such as many S-corp shareholder-employees. It is different from draws or distributions.

The balance used to start an account in the books. Opening balances are especially important when moving from old records, QuickBooks, or bank statements into a new system.

A normal cost of running the business, such as software, rent, advertising, wages, supplies, or insurance. Operating expenses are different from capital expenses that provide long-term benefit.

The common tax standard for many business deductions: ordinary for the industry and helpful or appropriate for the business. It does not mean every expense is automatically deductible.

Money or property an owner puts into the business. It is not sales revenue and should not inflate income.

Money moving between the owner and business with an intent to repay. Documentation matters because a loan is treated differently from a contribution, draw, distribution, or reimbursement.

Money a sole proprietor or single-member LLC owner takes out of the business for personal use. It is an owner transaction, not a business expense, so it does not reduce profit.

A record of a partner's investment, share of income or loss, distributions, and other partnership equity activity. It matters for partnership reporting and K-1s.

A business tax classification for an entity with more than one owner that is not taxed as a corporation. Partnerships generally file Form 1065 and issue K-1s.

A business whose income generally passes through to owners' tax returns instead of being taxed only at the entity level. Partnerships and S-corps are common examples.

A scheduled payment of payroll taxes to tax authorities. Deposit timing can differ from payroll dates and filing dates.

Amounts the business owes for payroll taxes, benefits, garnishments, or other payroll-related items. These balances need to be paid and reconciled.

Taxes tied to employee wages, such as Social Security, Medicare, unemployment, and withheld income tax. Getting payroll right means handling withholding, deposits, filings, and year-end forms.

A sales-tax connection created by physical presence, such as an office, employee, warehouse, inventory, or event activity in a state.

Matching point-of-sale reports to bank deposits, processor statements, cash, tips, refunds, and fees. It is critical for restaurants, salons, and retail businesses.

A payment made before the period it benefits, such as annual insurance or rent paid in advance. Depending on the facts and accounting method, the cost may be spread over time.

Goods held for sale, including retail items, ingredients, parts, or finished goods. Tracking product inventory helps keep COGS and margins accurate.

A report showing revenue, costs, and expenses over a period. It answers whether the business made or lost money during that period.

Profit is what the books say the business earned; cash is what is actually available to spend. Loan principal, owner draws, inventory purchases, unpaid invoices, and prepaid costs can make the two numbers move differently.

Billing customers in stages as work progresses instead of all at once. It is common in construction, trades, and project-based services.

Qualified Business Income deduction, also known as the Section 199A deduction, may reduce taxable income for eligible pass-through business owners. Limits depend on income, business type, wages, property, and other facts.

Periodic tax prepayments made when enough tax is not withheld during the year. They can cover income tax and self-employment tax.

The W-2 pay an S-corp must pay a shareholder-employee for services before taking non-wage distributions. The right amount depends on role, hours, market pay, and business facts.

A record showing what was purchased, when, from whom, and for how much. Receipts help prove business purpose and support deductions.

Changing a transaction from one category or treatment to another after review. Reclassifications are common when new context, a receipt, or a corrected explanation arrives.

Matching the books to an outside record, usually a bank, credit-card, loan, payroll, or processor statement. Reconciliation is how the business confirms that balances and transactions are complete.

Customer money sent back after a sale, or a vendor credit received after a purchase. Refunds and returns should be recorded so revenue, expenses, and cash all tell the same story.

Money paid back to someone who used personal funds for a business cost. To treat it cleanly, the business needs support showing what was bought, who paid, and why it belonged to the business.

Money received for use of property, space, or equipment. Rental activity may be tracked and reported differently from service revenue depending on the facts.

Property held to generate rental income. Rental activity often has its own income, expense, depreciation, security deposit, and mortgage-escrow treatment.

A repair keeps property working; an improvement generally makes it better, restores it, or adapts it to a new use. The distinction matters because repairs and improvements may be treated differently in the books and on taxes.

A type of exemption certificate used when a buyer purchases items for resale. It lets the seller document why sales tax was not collected.

A portion of a contract amount held back until work is complete or accepted. It can affect accounts receivable, revenue timing, and cash flow.

The profits a business has kept over time instead of distributing to owners. It is part of equity on the balance sheet.

Money paid in advance to reserve future services or ongoing access. It may be treated as deferred revenue until the related services are earned.

A tax election for eligible corporations or LLCs that can change how owner income is taxed. It often requires payroll for owner-employees and separate business tax filing.

A way to reduce underpayment-penalty risk by paying enough estimated tax under IRS safe-harbor rules. The exact rule depends on prior-year tax, current-year income, and taxpayer facts.

A state or local tax on certain sales of goods or services. Rules vary by state, product or service, buyer, and sales channel.

Tax collected from customers on taxable sales. It is money held for the tax authority, not sales revenue, until it is remitted or adjusted.

The balance of sales tax collected or owed that has not yet been remitted. It should be tracked separately from revenue.

A state registration that allows or requires a business to collect and remit sales tax. Permit rules vary by state and activity.

Sending collected sales tax to the appropriate tax authority. Remittance frequency and returns depend on state registration and filing requirements.

The form used by many sole proprietors and single-member LLCs to report business profit or loss on an individual return.

A form used to report certain rental real estate, royalty, partnership, S-corp, estate, trust, and similar income. Rental-property clients commonly see Schedule E.

A tax election that can allow a business to expense qualifying property sooner instead of depreciating it over time. It has limits and eligibility rules that should be reviewed each year.

Money held to secure a lease or rental agreement. It is usually not rental income when received; it is commonly a liability until returned, applied, or forfeited under the agreement.

Social Security and Medicare tax paid by people who work for themselves. It is separate from income tax and often paid through quarterly estimated taxes.

A tax measurement of an S-corp shareholder's investment in the company. Basis can affect whether losses are deductible and whether distributions are taxable.

Amounts charged to customers for shipping or delivery. It should be tracked separately from shipping costs and may have sales-tax implications.

A business operated directly by an individual without a separate tax entity. Many sole proprietors report business activity on Schedule C.

One bank or card transaction that needs to be divided across multiple categories, customers, entities, or tax treatments. A single deposit may include sales, tax collected, fees, refunds, and tips.

Payments to another business or worker hired to perform part of a job. They often need W-9 tracking, 1099 review, and job-cost assignment.

The support that proves what a transaction was for and why it belongs in the business. Receipts, statements, contracts, mileage logs, and written explanations can all help substantiate a transaction.

State unemployment tax paid under state rules. Requirements vary by state and can apply when a business has employees in that state.

A tax measurement of investment in an asset, partnership interest, or stock. Basis affects deductions, distributions, losses, and gain or loss on sale.

Extra time to file a tax return, not extra time to pay tax owed. A business or owner may still need to estimate and pay tax by the original due date.

Preparing, reviewing, signing, and submitting a tax return to the IRS and applicable states. Filing can usually begin only after books and documents are ready.

Forward-looking planning to reduce tax exposure or improve tax outcomes before decisions are locked in. It is different from preparing last year's return.

The annual period a tax return covers. Many small businesses use the calendar year, but some entities may use a fiscal year.

Income calculated under tax rules after allowed deductions, adjustments, and other tax-specific items. It can differ from book income.

The distinction between sales that require tax collection and sales that do not. It depends on product or service type, buyer, location, and state rules.

A wage-law concept that, where allowed, lets an employer count part of an employee's tips toward minimum wage obligations. Federal and state rules both matter, and some states do not allow it.

Amounts customers leave for workers. Tips are generally taxable to the worker and can create employer reporting, withholding, POS reconciliation, and payroll issues.

The account or classification assigned to a transaction. The right category depends on business purpose, not just the merchant name or bank description.

Money moving between accounts owned by the same business, such as checking to savings or card payment from checking. Transfers are not revenue or expenses when both sides belong to the same entity.

A report listing each account and its balance, used to check that total debits and credits are equal. It is a foundation for preparing financial statements.

Revenue earned but not yet invoiced. It matters for accrual reporting and project profitability.

A transaction that cannot be confidently classified yet. It usually needs context, a receipt, or confirmation before it can be finalized.

A companion to sales tax that can apply when taxable items are used in a state and sales tax was not collected at purchase. Businesses may owe use tax on certain untaxed purchases.

The year-end wage statement for an employee. It reports wages, taxes withheld, and other payroll information.

A worker treated as an employee for payroll and tax purposes. The employer withholds applicable taxes, handles payroll filings, and issues a W-2 after year-end.

A form used to collect a vendor or contractor's taxpayer identification information. It helps determine whether a 1099 may need to be issued.

Work in process: costs or revenue tied to jobs that are underway but not complete. It is common in construction, manufacturing, and project-based businesses.

Amounts held back from wages and sent to tax authorities on the employee's behalf. Withholding is not the same thing as employer payroll tax.

Insurance that can cover employees for work-related injuries or illness. Requirements vary by state and payroll setup.

Current assets minus current liabilities. It measures the short-term cushion available to fund day-to-day operations.

Informal term for a deductible business expense. It is not free money; it reduces taxable income only when tax rules allow it and the business has support.

Decisions made before year-end that can affect the current year's tax result. Examples may include timing purchases, retirement contributions, entity planning, payroll decisions, and documentation cleanup.

A form that reports certain card, payment-app, and online marketplace payments received for goods or services. It is a reporting form, not a complete profit calculation; the books still need refunds, fees, sales tax, and other records.

A form used to report certain miscellaneous payments, such as rent, prizes, awards, and other payment types that are not nonemployee compensation.

A form used to report nonemployee compensation paid to independent contractors and other non-employees. Businesses should collect W-9s and track eligible payments before year-end.