GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Short Tax Year


Synonyms:partial tax year, shortened tax year
Filed Under: financial-banking, taxation
Tags: banking, taxes
 

Definition of short tax year

short tax year
1. A tax period that is less than 12 months. This typically occurs with business start-ups or with the transition to a tax year ending on a different date.

Related Terms and Acronyms:

  • before-tax income   Earnings before income taxes are paid.
  • income tax   The main source of revenue for the federal government and many Provinces. The tax is based on your earned and unearned income. The amount or percentage taxed is based on the amount of income, using the governments graduated tax scale.
  • pre-tax operating income (PTOI)   The operating income generated by a company, less expenses, before taxes have been paid.
  • tax credit (TC)   Tax credits are used to reduce the amount of the tax owed. Tax credits are more valuable than deductions because they directly reduce the amount of tax owed, rather than reducing the amount of income that is taxed.
  • tax deduction   An expense that governments allow you to subtract from your income before computing your income tax.
  • tax deferral   The postponement of taxes to a later year, usually by recognizing income or a gain at a later time. Remember, this only delays your tax liability; it doesn't eliminate it.
  • tax exempt (TE)   Income that is not subject to tax. Income exempt from federal tax may, however, be subject to provincial taxation.
  • tax liability   The total amount of tax you owe.
  • tax refund   To receive money back from the government.
  • tax-sheltered   A savings or investment plan that offers significant tax savings.

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