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10-year Treasury Note - A debt obligation issued by the U.S.
Treasury that has a term of more than one year, but not more than 10
years.
Treasury notes bear a stated interest rate, and the owner receives
semi-annual interest payments. Treasury bills are short term
obligations with a term of one year or less and Treasury bonds have a
term of greater than 10 years.
1040 Form - The standard IRS form that individuals use to file their
annual income tax return. There are several variations of the 1040; the
one you choose depends on whether you process your taxes the old
fashion way or by computer
1040A Form - A simplified version of the 1040 form for individual
income tax. To be eligible to use a 1040A form, an individual must not
itemize or own a business and their taxable income has to be under $50,000. The form is similar to the "1040EZ" because its
quite simple and brief in comparison with the 1040.
1040EZ Form - Similar to the 1040 income tax form, 1040EZ offers a
faster and easier way to file your taxes. This form is only eligible for
people with income less than $50,000 and interest income of $400 or
less. The "EZ" implies that it is an "easier" form to file.
12B-1 Fees - A provision that allows a mutual fund to collect a
small fee from investors. This fee is designated for promotions, sales,
or any other activity connected with the distribution of the fund's
shares. The fee must be reasonable: 0.5% to 1% of the fund's net assets,
and up to a maximum of 8.5% of the offering price per share. Originally
the 12b-1 fee was thought to help investors. It was believed that by
marketing a mutual fund its assets would increase. This would
ultimately lower management expenses because the cost would be spread
out among more investors. However, like the Loch Ness monster, this has
yet to be proven. Most of the time the 12B-1 is just a way for fund
companies to impose hidden costs on investors. Most mutual funds with
12B-1 fees in excess of 0.25% are classified as a load fund
12B-1 Plan - A no-load mutual fund that is allowed to use fund
assets to pay for distribution costs rather than charging a 12b-1 fee.
The 12b-1 fee is an annual percentage charge based on the current value
of the investment. The Government typically restrict this to 1%.
30-Year Treasury - A U.S. Treasury debt obligation that has a
maturity of 30 years. The 30-year Treasury used to be the bellwether
U.S.
bond but now most consider the 10-year to be the benchmark.
The 30-year Treasury will generally pay a higher interest rate than
shorter Treasuries to compensate for the additional risks inherent in
the longer maturity. However, when compared to other bonds, Treasuries
are relatively safe because they are backed by the U.S. government.
3C7 - A portion of the Investment Company Act of 1940 that permits
the exclusion of investment companies from standard registration
requirements with the Securities and Exchange Commission (SEC) if all
U.S. investors are considered to be "qualified purchasers" or
"accredited investors." This particular section is one of the policies
used frequently by hedge fund companies to avoid certain SEC
requirements.
360-degree evaluation - An evaluation system that has employees not
only rated by supervisors, but also by peers, direct reports, and
sometimes clients and customers.
401(k) - Employer-sponsored investment program to set aside tax-deferred money for retirement.
401(k) plan - A type of qualified retirement plan authorized by Section 401(k) of the Internal Revenue Code.
401(k)/403(b) - An investment plan sponsored by employers that
allows individuals to set aside tax-deferred income for retirement or
emergency purposes. A 401(k) applies to private corporations, while a
403(b) applies to non-profit organizations.
401(k)/403(b) loan - A loan that can be taken against the amount
accumulated in the 401(k)/403(b) plans, if so allowed by the plan
administrator. Loans against these plans are an acceptable source of
down payment for most types of other loans.
412(i) Plan - A defined-benefit pension plan designed for small
business owners in the United States. This is a tax-qualified benefit
plan, so any amount that the owner contributes to the plan becomes
available immediately as a tax deduction to the company. The plan must
be funded solely by guaranteed annuities, or a combination of annuities
and life insurance.
These plans have been developed for small
business owners who find it difficult to invest in their company, while
also trying to save for retirement. This plan is unique in that it
provides
fully guaranteed retirement benefits, it must be funded by an insurance
company and it provides the largest tax-deduction possible. Due to the
large premiums that must be paid each year, this plan may not be ideal
for all small business owners. This plan would tend to benefit small
businesses that are established and quite profitable.
457 Plan - A non-qualified, deferred compensation plan established
by state and local governments and tax-exempt governments and
tax-exempt employers. Eligible employees are allowed to make salary
deferral contributions to the 457 plan. Earnings grow on a tax-deferred
basis and contributions are not taxed until the assets are distributed
from the plan. Employees are allowed to defer up to 100% of
compensation not exceeding the applicable dollar limit for the year. If
the plan does not meet statutory requirements, the assets may be subject
to different rules.
501(c) - A subsection under the United States Internal Revenue Code.
The subsection relates to non-profit organizations and tax law and
identifies which non-profit organizations are exempt from paying
federal income tax.
Under subsection 501(c) there are 12 other
sections that separate the different organizations according to
operations. The most common include:
c(1) - Any corporation that is organized under an act of Congress that is exempt from federal income tax
c(2) - Corporations that hold title of property for exempt organizations
c(3) - Corporations, funds or foundations that operate for religious, charitable, scientific, literary or educational purposes
c(4) - Non-profit organizations that promote social welfare
c(5) - Labor, agricultural or horticultural associations
c(6) - Business leagues, chambers of commerce, etc. that are not organized for profit
c(7) - Recreational organizations
52-Week High/Low - The highest and lowest price at which a stock
traded in the past 12 months, or 52 weeks. Many investors see the
52-week high or low as an important indicator. For example, a value
investor may view a stock trading at a 52-week low as an initial
indication of a possible value play (a stock sitting at a price below
its intrinsic value), however an
astute value investor will have to
conduct a lot more analysis to whole-heartedly come to this conclusion,
but the fact the stock is trading at its 52-week low can be a potential
starting point.
529 Plan - A plan that allows for the prepayment of qualified higher
education expenses at eligible educational institutions. Also known as
a "qualified tuition program", or more fully as a "section 529 plan".
The prepayment may be in the form of a contribution to an account
established specifically for paying higher educational expenses. There
is no income restriction for individuals who want to contribute to a
529 plan; however, because contributions cannot exceed the amount that
sufficiently covers the expenses of the beneficiary's qualified higher
education, individuals should take care not to over-fund the 529 plan.
8-K - A repcould be of importance to the shareholders or
the
Securities and Exchange Commission. Examples of events reported on an
8-K include acquisition, bankruptcy, resignation of directors, or a
change in the fiscal year. Also known as Form 8k.
90-Day Letter - An IRS notice sent after an audit stating that there
was a discrepancy or error within an individuals taxes and they will be
assessed unless petitioned. You have 90 days to respond, otherwise the
audit deficiencies will result in reassessment.
