Financial glossary

Your total income minus certain adjustments, such as deductible IRA and HSA contributions and student loan interest. It is the starting point for most income limits on your federal return.

Calculator: Schedule 1-A Calculator

See also: Modified adjusted gross income (MAGI)

In invoice factoring, the share of an invoice’s value the factor pays you up front — commonly 70% to 95%. The rest, minus the factoring fee, is paid after your customer pays the invoice.

Calculator: Invoice Factoring Calculator

Guide: Invoice Factoring vs. a Business Line of Credit: Cost, Speed and Fit

See also: Invoice factoring

The estimated market value of a property after planned renovations. In the BRRRR method, the refinance loan is usually sized as a percentage of the appraised after-repair value.

Calculator: BRRRR Calculator

See also: BRRRR method , Loan-to-value ratio (LTV)

Repaying a loan with equal scheduled payments that cover both interest and principal. Early payments are mostly interest; as the balance falls, more of each payment goes to principal. An amortization schedule shows the split payment by payment.

Calculators: Equipment Loan Calculator , Debt Consolidation Calculator , HELOC Payment Calculator

See also: Principal , Annual percentage rate (APR)

The yearly cost of borrowing, expressed as a percentage. For installment loans, APR includes the interest rate plus certain fees, so it lets you compare offers on equal terms. For credit cards, the APR is the interest rate charged on balances you carry.

Calculators: Credit Card Payoff Calculator , Debt Consolidation Calculator , Merchant Cash Advance Calculator

Guides: Factor Rate vs. APR: How to Compare Merchant Cash Advance Offers , How Credit Card Interest Is Calculated: APR, Daily Rates and Grace Periods

See also: Daily periodic rate , Factor rate

The share of household income you are expected to pay toward the benchmark Marketplace plan before the premium tax credit covers the rest. It rises with your income as a percentage of the federal poverty line.

Calculator: ACA Subsidy Calculator 2026

Guide: The 2026 ACA Subsidy Cliff: Who Loses Help and How to Stay Under 400%

See also: Premium tax credit , Benchmark plan (SLCSP)

The method most credit card issuers use to calculate interest: the balance at the end of each day in the billing cycle, added up and divided by the number of days. Interest is roughly the average daily balance times the daily periodic rate times the days in the cycle.

Calculator: Credit Card Payoff Calculator

Guide: How Credit Card Interest Is Calculated: APR, Daily Rates and Grace Periods

See also: Daily periodic rate , Grace period

SSDI benefits owed for the months between when your benefits should have started and when your claim was approved. They are usually paid as a lump sum, minus any representative fee.

Calculator: SSDI Back Pay Calculator

Guide: Approved for SSDI: Back Pay, Medicare and What Happens Next

See also: Established onset date (EOD) , Retroactive benefits , Representative fee

Moving a balance from one credit card or loan to another card, usually to use a low or 0% introductory APR. Most cards charge a balance transfer fee, commonly 3% to 5% of the amount moved.

Calculator: Balance Transfer Calculator

Guide: Balance Transfer vs. Personal Loan: Which Is Better for Credit Card Debt?

See also: Introductory (promotional) APR , Debt consolidation

The second-lowest-cost silver plan available to you on the Marketplace. Your premium tax credit equals the benchmark premium minus your expected contribution, and you can apply it to other Marketplace plans except catastrophic plans.

Calculator: ACA Subsidy Calculator 2026

Guide: The 2026 ACA Subsidy Cliff: Who Loses Help and How to Stay Under 400%

See also: Premium tax credit , Applicable percentage

A tax rule that lets a business deduct a large share of the cost of qualifying equipment in the first year instead of spreading it over several years. The 2025 tax law permanently restored 100% bonus depreciation for qualifying property acquired after January 19, 2025.

Calculator: Equipment Loan Calculator

Guide: Section 179 vs. Bonus Depreciation: Writing Off Equipment in 2026

See also: Section 179 deduction

Buy, rehab, rent, refinance, repeat: buying a property below its potential value, renovating it, renting it out, then doing a cash-out refinance based on the higher value to recover the cash you invested for the next deal.

Calculators: BRRRR Calculator , Rental Property Calculator

See also: After-repair value (ARV) , Seasoning period , Cash-out refinance

A property’s net operating income divided by its price or value. It measures the return of the property itself, ignoring financing, which makes it useful for comparing properties and markets.

Calculator: Rental Property Calculator

Guide: Cap Rate vs. Cash-on-Cash Return: How to Analyze a Rental Property

See also: Net operating income (NOI) , Cash-on-cash return

Annual pre-tax cash flow divided by the total cash you invested, such as the down payment, closing costs and repairs. Unlike the cap rate, it reflects how the property is financed.

Calculators: Rental Property Calculator , BRRRR Calculator

Guide: Cap Rate vs. Cash-on-Cash Return: How to Analyze a Rental Property

See also: Cap rate (capitalization rate)

Replacing your mortgage with a new, larger one and receiving the difference in cash. It resets the rate and term on your whole mortgage balance, which is why it is often compared with a HELOC.

Calculators: Cash-Out Refinance vs HELOC Calculator , Home Equity Calculator

Guide: HELOC vs. Cash-Out Refinance: How to Choose When Your Mortgage Rate Is Low

See also: HELOC (home equity line of credit) , Closing costs

Fees paid to finalize a mortgage or refinance, such as origination, appraisal, title and recording fees. They commonly total 2% to 5% of the loan amount.

Calculators: Cash-Out Refinance vs HELOC Calculator , BRRRR Calculator

Guide: HELOC vs. Cash-Out Refinance: How to Choose When Your Mortgage Rate Is Low

The total of all loans secured by a home — the first mortgage plus any home equity loan or HELOC — divided by the home’s value. Many lenders cap CLTV at 80% to 90% for home equity borrowing.

Calculators: Home Equity Calculator , HELOC Payment Calculator

See also: Loan-to-value ratio (LTV) , Home equity

The share of your available revolving credit you are using: total card balances divided by total credit limits. Credit scores consider both your overall ratio and each card’s ratio. Lower is better, and many experts suggest staying under 30%.

Calculator: Credit Utilization Calculator

A credit card’s APR divided by 365 (some issuers use 360). It is the rate applied to each day’s balance when interest is calculated.

Calculator: Credit Card Payoff Calculator

Guide: How Credit Card Interest Is Calculated: APR, Daily Rates and Grace Periods

See also: Annual percentage rate (APR) , Average daily balance

A payoff strategy: pay the minimum on every debt and put all extra money toward the debt with the highest interest rate first. It costs the least total interest.

Calculator: Debt Payoff Calculator

Guide: Debt Avalanche vs. Debt Snowball: What the Math and the Research Say

See also: Debt snowball

Combining several debts into one new loan or credit line, ideally with a lower interest rate or a single, predictable payment. Common options are personal loans, balance transfer cards and home equity loans.

Calculators: Debt Consolidation Calculator , Balance Transfer Calculator

Guide: Balance Transfer vs. Personal Loan: Which Is Better for Credit Card Debt?

See also: Balance transfer

For rental property loans, the property’s rental income divided by its monthly payment of principal, interest, taxes, insurance and any association dues. A DSCR of 1.0 means the rent exactly covers the payment; many lenders look for 1.0 to 1.25 or higher.

Calculator: DSCR Loan Calculator

Guide: DSCR Loans Explained: How Real Estate Investors Qualify Without Tax Returns

See also: PITIA , Net operating income (NOI)

A payoff strategy: pay the minimum on every debt and put extra money toward the smallest balance first, regardless of its rate. It usually costs more interest than the avalanche but delivers quick wins that help some people stay motivated.

Calculator: Debt Payoff Calculator

Guide: Debt Avalanche vs. Debt Snowball: What the Math and the Research Say

See also: Debt avalanche

Your monthly debt payments divided by your gross (pre-tax) monthly income. Lenders look at the front-end ratio, which counts housing costs only, and the back-end ratio, which counts all debts including housing.

Calculator: Debt-to-Income (DTI) Ratio Calculator

Guide: How Lenders Calculate Debt-to-Income Ratio (and What They Leave Out)

The first phase of a HELOC, often 10 years, when you can borrow against your line. Many lenders allow interest-only payments during this time.

Calculator: HELOC Payment Calculator

Guide: Your HELOC Draw Period Is Ending: 6 Options Before the Payment Jumps

See also: HELOC (home equity line of credit) , Repayment period

The date Social Security determines your disability began. It sets when your five-month waiting period starts, and so how much SSDI back pay you are owed.

Calculator: SSDI Back Pay Calculator

Guide: Approved for SSDI: Back Pay, Medicare and What Happens Next

See also: Five-month waiting period , Back pay (past-due benefits)

How merchant cash advances and some short-term business loans are priced: a multiplier, such as 1.3, applied to the amount advanced to get the total you repay. It is not an interest rate — because repayment is fast, the equivalent APR is usually far higher than the factor rate suggests.

Calculator: Merchant Cash Advance Calculator

Guide: Factor Rate vs. APR: How to Compare Merchant Cash Advance Offers

See also: Merchant cash advance (MCA) , Annual percentage rate (APR)

The poverty guidelines HHS publishes each year by household size. Marketplace subsidies use the prior year’s guidelines: 2026 coverage uses the 2025 figures, which start at $15,650 for one person in the 48 contiguous states.

Calculator: ACA Subsidy Calculator 2026

Guide: The 2026 ACA Subsidy Cliff: Who Loses Help and How to Stay Under 400%

See also: Subsidy cliff

SSDI benefits generally begin with the sixth full month after your established onset date; nothing is paid for the first five full months. People with ALS are exempt.

Calculator: SSDI Back Pay Calculator

Guide: Approved for SSDI: Back Pay, Medicare and What Happens Next

See also: Established onset date (EOD)

For credit cards, the time between the end of a billing cycle and the payment due date — at least 21 days when a card offers one. If you pay the full statement balance by the due date, you usually owe no interest on new purchases.

Calculator: Credit Card Payoff Calculator

Guide: How Credit Card Interest Is Calculated: APR, Daily Rates and Grace Periods

See also: Average daily balance

A revolving credit line secured by your home. You borrow as needed during the draw period, then repay principal and interest during the repayment period. Rates are usually variable: the prime rate plus a margin.

Calculators: HELOC Payment Calculator , Home Equity Calculator , Cash-Out Refinance vs HELOC Calculator

Guides: HELOC vs. Cash-Out Refinance: How to Choose When Your Mortgage Rate Is Low , Your HELOC Draw Period Is Ending: 6 Options Before the Payment Jumps

See also: Draw period , Repayment period , Prime rate , Combined loan-to-value (CLTV)

The percentage of daily card sales or deposits a merchant cash advance provider collects until the advance is repaid. A higher holdback repays the advance faster, which raises its effective APR.

Calculator: Merchant Cash Advance Calculator

Guide: Factor Rate vs. APR: How to Compare Merchant Cash Advance Offers

See also: Merchant cash advance (MCA)

Your home’s market value minus everything you owe on loans secured by it. Lenders usually let you borrow only part of it, because they cap the combined loan-to-value ratio.

Calculator: Home Equity Calculator

See also: Combined loan-to-value (CLTV) , HELOC (home equity line of credit)

A temporary low or 0% rate on purchases or balance transfers, often lasting 12 to 21 months. When it ends, any remaining balance starts accruing interest at the card’s regular APR.

Calculator: Balance Transfer Calculator

Guide: Balance Transfer vs. Personal Loan: Which Is Better for Credit Card Debt?

See also: Balance transfer , Annual percentage rate (APR)

Selling your unpaid customer invoices to a factoring company for immediate cash. The factor advances most of the invoice value, collects from your customer, then pays you the rest minus its fee.

Calculator: Invoice Factoring Calculator

Guide: Invoice Factoring vs. a Business Line of Credit: Cost, Speed and Fit

See also: Advance rate , Recourse factoring

The income-related monthly adjustment amount: an extra charge on Medicare Part B and Part D premiums for people with higher incomes. It is based on your MAGI from two years earlier, so 2026 premiums use your 2024 tax return. For 2026 it applies above $109,000 of MAGI for single filers and $218,000 for joint filers.

Calculator: IRMAA Calculator 2026

Guide: How to Appeal IRMAA: A Step-by-Step Guide to Form SSA-44

See also: Life-changing event , Modified adjusted gross income (MAGI)

An event such as retirement or reduced work hours, marriage, divorce or a spouse’s death that lets you ask Social Security to recalculate IRMAA using more recent income, by filing Form SSA-44.

Calculator: IRMAA Calculator 2026

Guide: How to Appeal IRMAA: A Step-by-Step Guide to Form SSA-44

See also: IRMAA

A loan’s balance divided by the value of the property securing it. A $240,000 mortgage on a $300,000 home has an 80% LTV.

Calculators: Home Equity Calculator , Cash-Out Refinance vs HELOC Calculator , BRRRR Calculator

See also: Combined loan-to-value (CLTV)

The rate applied to your last dollar of taxable income — your tax bracket. A deduction saves money at your marginal rate, so the same deduction is worth more in a higher bracket.

Calculators: Schedule 1-A Calculator , No Tax on Overtime Calculator , No Tax on Tips Calculator

See also: Tax deduction vs. tax credit

Most people approved for SSDI become eligible for Medicare after 24 months of disability benefits, counted from the month benefits begin rather than the approval date. People with ALS get Medicare as soon as their benefits start.

Calculator: SSDI Back Pay Calculator

Guide: Approved for SSDI: Back Pay, Medicare and What Happens Next

See also: SSDI (Social Security Disability Insurance)

A lump sum paid to a business in exchange for a share of its future sales, repaid through daily or weekly withdrawals. MCAs are usually structured as purchases of future receivables rather than loans, so they are priced with a factor rate instead of an interest rate — though some states, including California and New York, now require providers to disclose an estimated APR.

Calculator: Merchant Cash Advance Calculator

Guide: Factor Rate vs. APR: How to Compare Merchant Cash Advance Offers

See also: Factor rate , Holdback (retrieval rate)

The smallest amount you must pay on a credit card each month to stay current — often 1% to 3% of the balance plus interest and fees, or a flat minimum such as $25 to $40. Paying only the minimum can stretch payoff over many years and multiply the interest you pay.

Calculators: Credit Card Payoff Calculator , Debt Payoff Calculator

Adjusted gross income with certain amounts added back, and the definition depends on the program. For Marketplace subsidies it adds tax-exempt interest, untaxed Social Security benefits and excluded foreign income; for IRMAA, it is AGI plus tax-exempt interest; for the 2025–2028 tips, overtime, car loan interest and senior deductions, it is AGI plus excluded foreign income.

Calculators: ACA Subsidy Calculator 2026 , IRMAA Calculator 2026 , Schedule 1-A Calculator

Guides: The 2026 ACA Subsidy Cliff: Who Loses Help and How to Stay Under 400% , How to Appeal IRMAA: A Step-by-Step Guide to Form SSA-44

See also: Adjusted gross income (AGI) , Phase-out

A rental property’s income after operating expenses such as vacancy, property taxes, insurance, repairs and management, but before mortgage payments and income taxes.

Calculator: Rental Property Calculator

Guide: Cap Rate vs. Cash-on-Cash Return: How to Analyze a Rental Property

See also: Cap rate (capitalization rate)

An income range over which a tax benefit shrinks. For example, the tips and overtime deductions fall by $100 for every $1,000 of MAGI above $150,000 ($300,000 for joint filers).

Calculators: No Tax on Overtime Calculator , No Tax on Tips Calculator , Senior Deduction Calculator

Guide: Schedule 1-A Explained: The Four New Tax Deductions for 2025–2028

See also: Modified adjusted gross income (MAGI)

Principal, interest, taxes, insurance and association dues: the full monthly housing payment lenders use when calculating DSCR and debt-to-income ratios.

Calculators: DSCR Loan Calculator , Debt-to-Income (DTI) Ratio Calculator

Guide: DSCR Loans Explained: How Real Estate Investors Qualify Without Tax Returns

See also: Debt service coverage ratio (DSCR) , Debt-to-income ratio (DTI)

The federal subsidy that lowers Marketplace health insurance premiums. For 2026 it is generally available with household income from 100% to 400% of the federal poverty line. It can be paid in advance to your insurer and is reconciled on your tax return.

Calculator: ACA Subsidy Calculator 2026

Guide: The 2026 ACA Subsidy Cliff: Who Loses Help and How to Stay Under 400%

See also: Benchmark plan (SLCSP) , Subsidy cliff , Modified adjusted gross income (MAGI)

Your full monthly Social Security benefit, calculated from your lifetime earnings. Your SSDI benefit generally equals your PIA.

Calculator: SSDI Back Pay Calculator

See also: SSDI (Social Security Disability Insurance)

The benchmark rate banks use to set many variable rates, including most HELOCs and credit cards. It moves with the Federal Reserve’s target for the federal funds rate and typically sits 3 percentage points above the top of that range.

Calculator: HELOC Payment Calculator

See also: HELOC (home equity line of credit)

The amount you borrowed, or the part of it you still owe, not counting interest. Extra payments applied to principal reduce the interest charged from then on.

Calculators: Debt Payoff Calculator , Equipment Loan Calculator

See also: Amortization

For the overtime deduction, only the premium portion of overtime pay required by the Fair Labor Standards Act — the “half” in time-and-a-half for hours over 40 in a workweek. Regular pay for those hours, and overtime required only by state law or a contract, doesn’t count. The deduction is capped at $12,500 ($25,000 for joint filers).

Calculators: No Tax on Overtime Calculator , Schedule 1-A Calculator

Guide: Schedule 1-A Explained: The Four New Tax Deductions for 2025–2028

See also: Phase-out

For the tips deduction, voluntary cash or charged tips received in an occupation that customarily received tips on or before December 31, 2024, as listed by the Treasury. Mandatory service charges don’t qualify. The deduction is capped at $25,000.

Calculators: No Tax on Tips Calculator , Schedule 1-A Calculator

Guide: Schedule 1-A Explained: The Four New Tax Deductions for 2025–2028

See also: Phase-out

A factoring arrangement in which you must buy back or replace any invoice your customer fails to pay. Non-recourse factoring shifts some of that credit risk to the factor, usually for a higher fee.

Calculator: Invoice Factoring Calculator

Guide: Invoice Factoring vs. a Business Line of Credit: Cost, Speed and Fit

See also: Invoice factoring

The phase of a HELOC after the draw period ends, often lasting up to 20 years, when you can no longer borrow and must repay principal plus interest. Payments can jump sharply when it begins.

Calculator: HELOC Payment Calculator

Guide: Your HELOC Draw Period Is Ending: 6 Options Before the Payment Jumps

See also: Draw period , HELOC (home equity line of credit)

What an attorney or other representative is paid for winning a disability claim. Under a standard fee agreement it is 25% of past-due benefits, capped at $9,200, and Social Security pays it directly out of your back pay.

Calculator: SSDI Back Pay Calculator

Guide: Approved for SSDI: Back Pay, Medicare and What Happens Next

See also: Back pay (past-due benefits)

SSDI benefits paid for months before you applied. Social Security can pay up to 12 months of retroactive benefits if you were already disabled, and past the waiting period, during that time.

Calculator: SSDI Back Pay Calculator

Guide: Approved for SSDI: Back Pay, Medicare and What Happens Next

See also: Back pay (past-due benefits) , Five-month waiting period

The IRS form, new for 2025 returns, used to claim the four temporary deductions created by the 2025 tax law: qualified tips, qualified overtime, car loan interest and the senior deduction. You can claim them whether or not you itemize.

Calculators: Schedule 1-A Calculator , Car Loan Interest Deduction Calculator

Guide: Schedule 1-A Explained: The Four New Tax Deductions for 2025–2028

See also: Qualified tips , Qualified overtime compensation , Senior deduction

The time a lender requires between buying a property and refinancing it based on a new appraised value — commonly six months or more, depending on the lender and loan program. It shapes BRRRR timelines.

Calculator: BRRRR Calculator

See also: BRRRR method , Cash-out refinance

A tax election that lets a business deduct the full cost of qualifying equipment and software in the year it is placed in service, rather than depreciating it over time. The 2025 tax law raised the annual limit to $2.5 million, phasing out once equipment purchases exceed $4 million.

Calculator: Equipment Loan Calculator

Guide: Section 179 vs. Bonus Depreciation: Writing Off Equipment in 2026

See also: Bonus depreciation

A temporary deduction of up to $6,000 for each taxpayer age 65 or older, for tax years 2025 through 2028. It is reduced by 6% of MAGI above $75,000 ($150,000 for joint filers) and comes on top of the regular extra standard deduction for people 65 and older.

Calculators: Senior Deduction Calculator , Schedule 1-A Calculator

Guide: Schedule 1-A Explained: The Four New Tax Deductions for 2025–2028

See also: Standard deduction , Phase-out

A federal benefit for people who can’t work because of a medical condition expected to last at least 12 months or to result in death, and who have worked long enough under Social Security. Benefits are based on your earnings record, not on financial need.

Calculator: SSDI Back Pay Calculator

Guide: Approved for SSDI: Back Pay, Medicare and What Happens Next

See also: Back pay (past-due benefits) , Primary insurance amount (PIA)

A flat amount that reduces your taxable income if you don’t itemize. For 2026 it is $16,100 for single filers and $32,200 for married couples filing jointly, plus an extra amount for each person who is 65 or older or blind.

Calculators: Senior Deduction Calculator , Schedule 1-A Calculator

See also: Senior deduction

The income point — 400% of the federal poverty line — above which Marketplace premium tax credits generally stop entirely. It returned for 2026 after the enhanced credits of 2021–2025 expired, so earning slightly more can cost thousands of dollars in lost help.

Calculator: ACA Subsidy Calculator 2026

Guide: The 2026 ACA Subsidy Cliff: Who Loses Help and How to Stay Under 400%

See also: Premium tax credit , Federal poverty level (FPL)

A deduction lowers your taxable income, so it saves your marginal tax rate times the deduction. A credit reduces your tax bill dollar for dollar. In the 22% bracket, a $1,000 deduction saves $220, while a $1,000 credit saves $1,000.

Calculator: Schedule 1-A Calculator

See also: Marginal tax rate