AFSP flashcards
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31 cards. Read the term and the definition here. The deck at the top of this page is optional.
- CE credit hour definition
- A unit of continuing education typically representing 50 minutes of approved instruction; the number of hours required per renewal cycle is set by each state insurance department.
- Ethics CE requirement
- A state-mandated portion of continuing education devoted to ethics; the hours usually count toward, rather than in addition to, the total CE requirement.
- Course approval requirement
- Only courses approved by the state insurance department or an approved sponsor earn CE credit; completing unapproved coursework does not satisfy the requirement.
- CE reporting responsibility
- Providers typically report completion to the state within a set number of days; the licensee should confirm credit posted and retain certificates as proof.
- CE carryover rules
- Some states allow excess CE hours to apply to the next renewal cycle, while others do not; the specific state rule determines whether carryover is permitted.
- CE noncompliance consequences
- Missing the CE deadline can lead to license expiration, fines, late fees, or a remediation period, depending on the rules of the licensing state.
- CE exemption and extension
- Certain licensees, such as new licensees, active military, or those with documented hardship, may qualify for reduced requirements if the state approves a request.
- Renewal cycle length
- The period between license renewals, commonly two years in many states, during which the required continuing education hours must be completed.
- CE record retention
- Licensees should keep completion certificates for the period set by state rule, commonly several years, because providers may not retain records for audits.
- Sponsor vs. provider
- A sponsor is approved to offer or administer CE courses; a provider delivers instruction. Both roles may require separate state approval before credit is awarded.
- Distance learning CE credit
- Online or self-study courses may earn CE credit only if the format is approved by the state and includes any required monitoring, testing, or time-tracking.
- Duplicate course credit
- Repeating the same approved course within a cycle generally earns no additional credit; states typically require new or non-duplicated coursework.
- Progressive tax brackets
- Each marginal rate applies only to income falling within its bracket, so total tax equals the sum of tax computed at each successive bracket rate.
- Marginal vs. effective rate
- The marginal rate applies to the last dollar of income, while the effective rate equals total tax divided by total income and is generally lower.
- Long-term capital gain rate
- Gains on assets held more than one year are taxed at preferential rates of 0%, 15%, or 20%, depending on the taxpayer's taxable income level.
- Short-term capital gain
- Gains on assets held one year or less are taxed as ordinary income at the taxpayer's marginal rate rather than at preferential capital gain rates.
- Holding period rule
- Property must be held for more than one year to qualify for long-term capital gain treatment; exactly one year or less is short-term.
- Qualified dividend taxation
- Qualified dividends are taxed at the same preferential rates as long-term capital gains, while nonqualified dividends are taxed as ordinary income.
- Traditional IRA deduction
- Contributions may be deductible depending on income and workplace plan coverage; withdrawals are taxed as ordinary income and early withdrawals may face a penalty.
- Roth IRA contributions
- Roth contributions are made with after-tax dollars, grow tax-deferred, and qualified withdrawals are tax-free; income limits may restrict eligibility.
- Early withdrawal penalty
- Distributions from traditional retirement accounts before age 59½ are generally subject to a 10% additional tax unless a specific exception applies.
- Required minimum distributions
- Mandatory annual withdrawals from traditional retirement accounts generally begin at age 73 for those born 1951–1959 and age 75 for those born 1960 or later.
- RMD penalty excise tax
- Failing to withdraw the required minimum distribution can trigger an excise tax on the shortfall amount, which may be reduced if corrected promptly.
- Standard deduction
- A flat deduction from gross income that varies by filing status; taxpayers may claim it instead of itemizing qualifying expenses such as mortgage interest.
- SALT deduction cap
- State and local taxes, including income and property taxes, are deductible only up to a statutory cap for taxpayers who itemize their deductions.
- Charitable contribution deduction
- Donations to qualified organizations may be deductible for itemizers, subject to percentage-of-income limits and substantiation requirements such as written acknowledgment.
- Taxation of Social Security
- A portion of Social Security benefits may be taxable based on combined income, calculated as adjusted gross income plus tax-exempt interest plus half of benefits.
- Annual gift tax exclusion
- Gifts up to a per-donor, per-recipient annual limit escape gift tax and generally need no return; excess amounts count against the lifetime exemption.
- Gift recipient income tax
- The recipient of a gift generally owes no income tax on the value received; any gift tax liability, if applicable, falls on the donor.
- Adjusted gross income
- Gross income minus certain above-the-line adjustments such as deductible IRA contributions and student loan interest; it is the starting point for many tax calculations.
- Above-the-line deduction
- A deduction subtracted before adjusted gross income is calculated, available whether or not the taxpayer itemizes, such as certain retirement or health savings contributions.