- an individual's total gross income minus specific, allowable deductions
a key figure used on federal and state tax returns to determine your tax liability and eligibility for various tax credits and other benefits. |
| CBO | Community Based Organization | typically a non-profit group focused on serving the local community |
| COLA | Cost of Living Adjustment | - an adjustment to net income to account for higher/lower than average cost of living in a particular location
In Clarity, you may make this setting globally in your Annual Settings → Methodology, or you can adjust in an individual application on the STB. |
| CSM | Client Success Manager | Your dedicated school contact at Clarity to support school users and provide training |
| DASL | Data & Analysis for School Leaders | an NAIS acronym used for their annual report. Participating member schools report data annually in the fall. |
| DI | Discretionary Income | - the money the household has available to spend after taxes & required expenses
In Clarity = Income - Taxes - Expenses + Income Adjustment (percentage of net weighted assets) = Discretionary Income |
| DNF | Does Not File OR Did Not Fund | - tax filing status for a person who does not file U.S. taxes
term used when you did not award a financial aid amount to an applicant |
| DNQ | Does Not Qualify | term used when someone has completed a financial aid app and, upon review, it was determined that they do not qualify for financial aid |
| FA | Financial Aid | Term used by schools to offer discounts to tuition. Other terms include Tuition Assistance, Tuition Aid, Flexible Tuition, etc. |
| FAFSA | Free Application for Federal Student Aid | An acronym used for the free online application tool that determines a student’s eligibility for federal financial aid for higher education. |
| FTIN | Foreign Taxpayer Identification Number | - a unique identifier issued by a country's tax authority to identify individuals or businesses for tax purposes within that foreign jurisdiction
required by the IRS and financial institutions for non-U.S. individuals or entities who have financial accounts or tax obligations in the U.S.
In Clarity, can be used on the 8821 or 4506c in lieu of an SSN |
| HE | Home Equity | Home equity is the portion of your home's value that you own, calculated by: Current Market Value - Current Mortgage = Home Equity |
| KYC | Know Your Customer | A mandatory process that many companies and financial institutions use to verify the identity of their clients to prevent fraud. In Clarity, are required to do a one-time ID verification. |
| MFA | Multi-Factor Authentication | - a security method that verifies a user's identity by requiring two or more different types of proof, such as a password and a code sent to a phone
aka two-factor authentication or 2FA
required for all Clarity school/admin users |
| NTR | Net Tuition Revenue | the revenue that a school recognizes minus discounts & financial aid |
| SSN | Social Security Number | a unique, nine-digit number issued by the United States government to citizens, permanent residents, and eligible temporary residents for tracking earnings, determining eligibility for Social Security benefits, and for identification purposes |
| TA | Tuition Assistance | Term used by schools to offer discounts to tuition. Other terms include Financial Aid, Financial Assistance, Flexible Tuition, etc. |
| TCS | Tuition Charging School | used in Applicant Table filter to reference number of students a family has in a tuition charging school |
| 529 | 529 Plan | This is a tax-advantaged investment/savings account used for college and in some states may also be used for K-12 education without tax penalty. |
| 1099 | Form 1099 | - an informational tax document issued by a person or entity that summarizes non-employment income paid to a taxpayer during the calendar year.
used to report various types of income that do not have taxes automatically withheld. Common examples are income from freelance work (1099-NEC), investments (1099-INT, or 1099-DIV), or state tax refunds (1099-G). |
| CLARITY TERMS | | |
| AMV | Awaiting Manual Verification | - a financial aid status on the Applicants table
when there’s a rejection of the request for taxes, failure of KYC, and no movement after choosing the IRS.gov path, households will appear in AMV; they’re prompted to manually upload their tax docs and Clarity’s team will review them once submitted |
| ETV | Enhanced Tax Verification | Clarity’s term for the tax verification process |
| ST | Suggested Tuition | The calculated amount Clarity is suggesting the family could pay, based upon your school methodology settings. Contact your CSM to learn more. |
| STB | Suggested Tuition Breakdown | This refers to one of the tabs within an applicant file, where schools may find the Suggested Tuition. |
| FILE REVIEW | | |
| FSA | Flexible Spending Account | An employer-sponsored benefit that allows W2 wage earners to set aside pre-tax wages for eligible out-of-pocket healthcare or dependent care costs. |
| HSA | Health Savings Account | A tax-advantaged savings account for paying qualified medical expenses, available to those with a high-deductible health plan (HDHP). |
| IRA | Individual Retirement Account | A tax-advantaged investment account used for retirement. |
| KEOGH | a type of Retirement Account | A tax-deferred retirement plan available to self-employed individuals and unincorporated businesses (sole proprietorships and partnerships). |
| K1 | Schedule K1 | Business tax document submitted along with a 1065 or 1120S to show the individual shareholder’s portion of income, losses, deductions, & credits. |
| P&L | Profit & Loss Statement | A business financial report that shows revenues & expenses, profits & losses over a particular time period. |
| RSU | Restricted Stock Unit | A type of employee compensation where a company promises to grant the employee shares of stock after a certain period of employment or specific milestones are met. These units do not value until they vest, at which point you receive the actual shares and are taxed at that time as ordinary income. RSU’s may show up combined with W2 wage income. Schools may want to request an end-of-year paystub for greater clarity on compensation from RSUs vs wages. |
| SEP | Simplified Employee Pension | An individual retirement account that an employer or self-employed person can establish. |
| BUSINESS TAX TYPE | BUSINESS TAX FORM USED | |
| Partnership | IRS Form 1065 | Partnerships file taxes on Form 1065. Each partner receives a Schedule K-1 indicating their share of income. This income will be reported on Schedule E of the partner’s personal tax return (1040). |
| S-Corporation | IRS Form 1120S | S-corps file taxes on Form 1120s. Each shareholder receives a Schedule K-1 indicating their share of income. This income will be reported on Schedule E of the partner’s personal tax return (1040). |
| C-Corporation | IRS Form 1120 | C Corporations are often larger companies with many shareholders. Owner/shareholders do not receive a K-1. Income from a C-corp to the owner is often in the form of dividends. These dividends are then reported on the personal income tax return (1040). |
| LLC (Limited Liability Corporation) | Depends on the type of LLC | An LLC can choose to be taxed as a corporation (S-Corp or C-Corp) or if a single-member LLC, they can file a Schedule C on their personal income tax return (1040). |
| LLC (Schedule C Tax filer) | Schedule C | In Clarity’s Family Application, we specify the LLC with a Schedule C tax filer so we more accurately trigger document requests. |
| Sole Proprietorship | Schedule C | This business type is used when the business is owned by one person, and all business income and expenses are reported on the personal income tax return (1040) on Schedule C. |
| CANADIAN TAX FORMS | | |
| T1 | Canadian Income Tax Return | equivalent to the U.S. Tax Form 1040 |
| T4 Slip | T4 Slip | the Canadian equivalent of a U.S. W2 |
| Notice of Assessment | Canadian Tax Document | A receipt or proof of filing for Canadian taxes |
| Relevé | Canadian Tax Document | - Quebec Residents
commonly known as the RL1, equivalent of the T4 but for Quebec & Montreal residents |
| T2125 | Canadian Tax Document | statement of business income |
| T776 | Canadian Tax Document | statement of real estate rentals |
| IRS Tax Authorization FORMS | | |
| 4506-C | IRS Form 4506-C | - IRS document used to request tax transcripts through an authorized Income Verification Express Service (IVES) participant
primarily used by third parties, such as mortgage lenders, to verify a taxpayer's income or creditworthiness during a loan application process |
| 8821 | IRS Form 8821 | IRS form that authorizes any individual, corporation, firm, organization, or partnership you designate to inspect and/or receive your confidential information verbally or in writing for the type of tax and the years or periods specified |
| NATIONAL ORGANIZATIONS | | |
| AISAP | Association of Independent School Admission Professionals | an organization that provides education and resources for professionals in independent school admissions |
| EMA | Enrollment Management Association | - A non-profit that supports over 1,300 schools and more than 80,000 families annually with industry-leading enrollment services
Now known as E3n |
| NAIS | National Association of Independent Schools | A U.S. nonprofit organization that provides support and advocacy for independent schools |
| NBOA | National Business Officers Association | professional organization for business leaders at independent schools that provides resources, guidance, and professional development |