Tax, bookkeeping and business glossary
Plain-language explanations for tax, bookkeeping and business discussions, with links to IRS and Minnesota Revenue guidance. Your tax treatment depends on your facts, the applicable tax year and current rules; these definitions do not replace an individual review.
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Bookkeeping · Account reconciliation · Supporting records · Record retention · Tax deduction · Tax credit · Estimated tax · Tax withholding · Extension to file · EIN — employer identification number · Self-employment · Sales and use tax · Minnesota payroll withholding · Federal and Minnesota tax · Tax year and form instructions · Official resources
Bookkeeping
Recording and organizing business transactions so income, expenses and supporting documents can be reviewed and used for reporting.
Account reconciliation
Comparing accounting records with statements and other evidence, then identifying and resolving differences. It supports reliable records.
Supporting records
Invoices, receipts, statements and other evidence supporting entries and tax reporting. A bank transaction alone may not explain its business purpose.
Record retention
How long records should be kept depends on what they document and applicable requirements. Keep records for the periods applicable to the transaction and filing.
Tax deduction
An eligible amount that reduces income subject to tax. Eligibility and documentation depend on the applicable rules.
IRS — credits and deductions ↗
Tax credit
An eligible amount applied against tax. Refundability and other restrictions vary by credit and taxpayer situation.
IRS — credits and deductions ↗
Estimated tax
Payments made during the year toward tax that is not sufficiently covered by withholding. Check the current instructions for your circumstances.
Tax withholding
Tax taken from certain payments and sent to the taxing authority. Federal and Minnesota withholding must be considered separately.
IRS — Tax Withholding Estimator ↗
Extension to file
Additional time to submit a return when the applicable requirements are met. It generally does not extend the time to pay.
EIN — employer identification number
A federal tax identification number used for businesses and other entities. Applying for an EIN does not by itself form a business entity.
IRS — employer identification number ↗
Self-employment
Working in your own trade or business. Federal and Minnesota filing and payment responsibilities depend on the facts.
Minnesota Revenue — self-employed ↗
Sales and use tax
Taxes that may apply to taxable purchases or transactions. Minnesota guidance explains when collection, reporting, payment or an exemption applies.
Minnesota Revenue — sales and use tax ↗
Minnesota payroll withholding
Minnesota income tax withheld from applicable employee pay and remitted by the employer under state requirements.
Minnesota Revenue — withholding tax ↗
Federal and Minnesota tax
Separate tax systems with their own forms and requirements. A federal filing or payment does not automatically complete a Minnesota obligation.
Minnesota Revenue — individual income tax ↗
Tax year and form instructions
The reporting period to which a return relates. Use the appropriate year's forms and instructions rather than assuming prior-year rules are unchanged.
IRS — forms and instructions ↗
Official resources and reference material
These links identify the agencies, manufacturer-information directories and providers referenced in this glossary. External sites maintain their own content and access requirements. Check the current source and its scope before acting; a glossary is not a substitute for applicable instructions or an individual review.
- IRS — federal tax information ↗ — Federal tax information, tools and current instructions.
- Minnesota Department of Revenue ↗ — Minnesota tax information and official services.
- IRS — recordkeeping ↗ — Supporting records, business books and retention considerations.
- IRS — small businesses and self-employed ↗ — Federal business and self-employment tax topics.
- IRS — credits and deductions ↗ — The difference between a credit and a deduction, and eligibility resources.
- IRS — estimated taxes ↗ — Pay-as-you-go tax information and current payment instructions.
- IRS — Tax Withholding Estimator ↗ — Federal withholding planning tool and limitations.
- IRS — filing extensions ↗ — An extension to file generally does not extend the time to pay.
- IRS — employer identification number ↗ — Official EIN information and application guidance.
- IRS — forms and instructions ↗ — Use the form and instructions for the appropriate tax year.
- Minnesota Revenue — individual income tax ↗ — Minnesota individual filing, payment and refund guidance.
- Minnesota Revenue — businesses ↗ — Minnesota business tax registration and filing resources.
- Minnesota Revenue — sales and use tax ↗ — Taxable transactions, use tax, exemptions and applicable guidance.
- Minnesota Revenue — withholding tax ↗ — Minnesota employer withholding responsibilities.
- Minnesota Revenue — self-employed ↗ — State guidance for self-employed taxpayers.
Reference links reviewed October 15, 2026. Please use the latest instructions for your situation.