Tax Glossary

Generally, an unmarried person who maintains a household for dependents and is allowed to compute his or her tax based on head of household rates, which are more favorable than single person rates.

Employer established account that provides tax-free reimbursements to employees for deductibles and other expenses that could be taken as itemized deductions.

For calendar year 2007, taxpayers covered by an HDHP may contribute up to the lesser of the annual deductible or $2,850 ($5,650 for family coverage).

For 2007, a high deductible health plan is a health plan with an annual deductible that is not less than $1,100 for self-only coverage or $2,200 for family coverage, and with annual out-of-pocket expenses that do not exceed $5,600 or $11,200, respectively.

Hobby expenses are deductible only up to income from the activity; loss deductions are not allowed.

The length of time that an asset is owned and that generally determines long- or short-term capital gain treatment.

Debt secured by a principal residence or second home to the extent of the excess of fair market value over acquisition debt. An interest deduction is generally allowed for home equity debt up to $100,000 ($50,000 if married filing separately).