Future Income Tax

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Future Income Tax

In accounting, a way for a company to avoid taxes following years in which it had a net operating loss. If a company deducts more than its net income in a given tax year, it may take the difference between the deduction and the net income (a negative number) and apply it as a deduction on taxable income for up to 7-10 years. For example, if a company loses $500,000 in one year, and makes $1,000,000 the following year, it may only be liable for a $500,000 profit.
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References in periodicals archive ?
The change is primarily due to lower recovery of future income taxes, depreciation and salvage expenses.
We anticipate that the Company will recover our write-down of the deferred tax asset in fifteen months through lower future income taxes. We remain confident in our Company's future earning potential due to our strong asset quality and a vibrant local economy."
They are basically credits it could have used to pay future income taxes. These credits built up after the big Wall Street banks took billions of dollars in losses from bad mortgages and other toxic assets.
On the other hand, the value of a Roth IRA does not need to be discounted to account for future income taxes.
Voters also approved a cap of 2 percent on future income taxes, with 56 percent in support.
In Robinson, 69 TC 222 (1977), the Tax Court examined whether to discount the value of installment notes in an estate for future income taxes that the beneficiaries of those notes would pay on the income in respect of a decedent (IRD) included in future installments.
earnings attributed to the ESOP, thus permanently eliminating future income taxes. If the ESOP ultimately becomes the sole owner of the business, all income taxes are eliminated.
That debt can only be repaid through future income taxes to redeem the bonds in the lockbox.
A temporary, one-time decrease in a state's corporate income tax revenues over a short period of years will be more than replaced in the long run by permanent increases in state withholding taxes, sales and use taxes, future income taxes, and other business taxes that the business will pay.
The trust is selling most of its 76 percent ownership of the company for $565 million in equity, plus $90 million in settlement of Manville's obligation for future income taxes of the trust, according to a company spokesman.
In the end, the policy represents a decision to maintain the path of Social Security benefits and pay for them out of future income taxes collected by the federal government.
Besides preparing taxes, a CPA is qualified to assist you in tax planning strategies so that you can reduce future income taxes. Service from a CPA is generally more personal and comprehensive, as the CPA is concerned with helping you manage your tax liabilities.

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