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Normal People Try To Define 12 Tax Terms

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We asked seven BuzzFeed employees to see if they know the definitions to these tax terms.

They didn't...but at least they tried.

1. What is a "1040"?

Via cheezburger.com

Sami: The form number represents the minimum amount of months it's going to take you to pay off your student loans.

Isa: The 1040 is the standard tax form, I'm pretty sure. I think I've filled a few of these out online.

Dan: What you pour down the drains to unclog your roommate's hair.

(Actually, a 1040 is an IRS form used to file annual income tax returns.)

2. What is "Adjusted Gross Income"?

Via cheezburger.com

Sami: The amount of money you wish you could adjust because the amount of taxes taken out from your rightful whole salary is sooooo gross.

Dan: I think this is the disappointing, real amount of $$$ you make after half your paycheck goes to other boring places that aren't the bar or pizza.

Will: My income before and after I buy and eat several full sleeves of Oreos in the dark of night.

Jen: Take it from a broke girl: Income is NEVER gross, no matter how adjustable.

(Actually, Adjusted Gross Income, or AGI, is a measure of how much of a taxpayer’s income is taxable.)

3. What is an "Itemized Deduction"?

Via mash123.com

Annabelle: I know this one... This is where you go through and try to attribute as many things you can to a "work lunch" or "drunk work Uber" or "work conference that just happened to take place at Taco Bell."

Dan: A very thorough list of where all your money has gone. Pro tip: Keep a box of tissues nearby for this portion.

(Actually, Itemized Deductions are IRS-approved deductions to your Adjusted Gross Income.)

4. What is "Voluntary Compliance"?

ABC / Via cheezburger.com

Jake: Is this a sex thing?

Annabelle: This term suggests that there's a rule you have the option of complying with, but no doubt it's one of those situations like when your mom "asks" you to clean your room.

(Actually, Voluntary Compliance is the principle that all taxpayers will follow tax laws and report everything truthfully.)

5. What is "Progressive Taxation"?

youtube.com / Via cheezburger.com

Will: I think I follow them on Tumblr.

Isa: As you become more and more an adult, they tax you more.

(Actually, Progressive Taxation is a tax that functions on tax bracket levels, taking a larger percentage from high-income earners than it does from low-income earners.)

6. What is "Withholding"?

Via cheezburger.com

Jake: What my mother is, in regards to her emotions.

Annabelle: I think you're meant to do this for the first three to five dates.

Isa: Claiming 1 or 0 on your W-2, although I'm not sure why. Just know it affects the number.

(Actually, Withholding is a portion of employee wages that goes directly to federal, state, and local tax authorities instead of being included in their paycheck.)

7. What is "Accelerated Depreciation"?

Via cheezburger.com

Jake: A memoir by my bank account.

Annabelle: A classy-sounding term for what I do on a Friday night.

Sami: A documentary about Rollerblading falling out of vogue in popular culture.

(Actually, Accelerated Depreciation is a method used in financial accounting so that greater deductions are taken earlier in an asset’s life.)

8. What are "Bearer Securities"?

BuzzFeed Violet / Via youtu.be

Annabelle: I imagine this means that pregnant women are allowed to pay fewer taxes. If it doesn't mean that, it should.

Dan: Isn't there something about this in the Second Amendment? The right to Bearer Securities?

Jen: I thought we were discussing human tax law, not bear tax law. I HAVE NO EXPERTISE HERE.

(Actually, a Bearer Security is a piece of paper that bestows ownership of a security -- stocks, shares, bonds -- to whoever actually possesses the document.)

9. What is a "Flag Of Convenience"?

Via funnyjunk.com

Jake: The only thing I'll pledge allegiance to.

Sami: Electing to skip a section and deciding to fly your flag of convenience as a sign of personal IDGAF

Jen: Having your mom be an accountant. #LoveMyLife

(Actually, a Flag of Convenience is a practice where companies claim to be “based” in states where they do no business in order to take advantage of those states’ lenient tax laws.)

10. What is "Jeopardy Assessment"?

Via cheezburger.com

Annabelle: I'll take "The Risk of Getting Audited" for $500.

Isa: Probably in too low of a tax bracket to even know what this means.

(Actually, a Jeopardy Assessment is an inquiry by the IRS into a taxpayer’s account when it appears that they are trying to evade paying taxes by leaving the country or hiding taxable property.)

11. What is a "Phantom Stock Plan"?

youtube.com / Via meow-purr-knead.tumblr.com

Annabelle: This is absolutely something that I would invest in. Billy Zane is sexy.

Dan: Your stock plan does not exist. Please stop pretending like you have a stock plan, sir.

(Actually, a Phantom Stock Plan is an agreement between a company and a recipient that entitles the recipient to a cash payout at a future date.)

12. What is the "One Hundred and Eighty-Three Days' Rule"?

Via cheezburger.com

Annabelle: This is definitely how long you have to wait before dating your best friend's ex. I'm not sure what this is doing here.

Sami: The arbitrary grace period you give yourself to turn your taxes in after the deadline. Seems legit.

Dan: This is a rat's version of our 5-second rule. (Yes, even rats have *some* standards.)

(Actually, the 183 Day Rule is an IRS test to determine if an individual is a “resident” who is subject to the income tax -- basically if they were present in the country for at least 183 days over the prior three years.)

Thumbnail image from ThinkStock.

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