Tax Definitions and Terms (M)

Marginal Tax Rate: Combined federal and state tax rates that are paid on the highest or last dollars that are earned.

Marital Deductions: Deduction that allows unlimited transfers of assets from one spouse to another without having to pay gift or estate taxes.

Market Discount: The difference between the face value of a bond and the lower market value, usually attributed to rising interest rates. The gain is normally taxed as ordinary income to the extent of the discount.

Medical Expenses: Expenses that exceed 7.5% of your adjusted gross income can be deducted on Schedule A.

Miscellaneous Itemized Deductions: Deductions for job or investment expenses that exceed 2% of adjusted gross income.

Mortgage: A mortgage is a document that fulfills the rights of a lender that makes a loan (or lien) against real property as security for repayment of the debt.

Mortgage Interest: A deduction on the mortgage interest paid on a primary or secondary residence. It is deducted on the first $1 million in mortgage debt and $100,000 of home equity debt.

Finance Topic of the Month: Buying a home is still the best investment most people will make in their lifetime.