after-tax income


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Profit

A company's total revenue less its operating expenses, interest paid, depreciation, and taxes. For example, suppose a widget manufacturer earns $1,000,000 in total revenue. The widgets cost $200,000 to make and his administrative and payroll expenses total $250,000. He also must subtract $50,000 in depreciation on his widget manufacturing equipment and pay $200,000 in taxes. His net income is stated as: $1,000,000 - $200,000 - $250,000 - $50,000 - $200,000 = $300,000.

After-tax income.

After-tax income, sometimes called post-tax dollars, is the amount of income you have left after federal income taxes (plus state and local income taxes, if they apply) have been withheld.

If you contribute to a nondeductible individual retirement account (IRA), a Roth IRA, or a 529 college savings plan, purchase an annuity, or invest in a taxable account, you are using after-tax income.

In contrast, if you contribute money to an employer sponsored retirement plan or flexible spending account, you are investing pretax income.

after-tax income

Income after deducting taxes.After-tax income is not the same thing as after-tax cash flow.The major difference between the two will usually occur because depreciation is a deduction from income but not cash flow.You don't write a check for depreciation.The other major difference arises because you write a check for mortgage principal payments, which reduces cash flow, but you can't deduct it,so it does not reduce taxable income.

References in periodicals archive ?
The 20 (th) to 25 (th) percentile of workers receive the largest increase in after-tax income, with over a 10 percent increase.
After-tax income, after-rent income and total expenditure all had an independent inverse relationship with food insecurity in the fully adjusted models.
Compare that with the average after-tax income of the middle fifth of the population, which rose a modest 15 percent, or $5,700, over the same period, reaching $43,700 in 2002.
This paper examined the distribution of the total effective tax rates, the share of after-tax income, and the amount of after-tax income among the bottom, middle, and highest household income quintiles, as well as the top one percent, by presidential administration between 1981 and 2000.
In 2000, the 2.8 million people who made up the top 1 percent of the population received more total after-tax income than did the 110 million people who made up the bottom 40 percent.
The after-tax income for the average Norwegian household had decreased by 1% in real values after many years of growth, according to the agency.
If, however, the right question is about the distribution of after-tax incomes, the intuitively fair thing might be to cut taxes so that taxpayers at all income levels enjoyed the same percentage increase in after-tax income.
However, earnings were down 15.1% to $48.5 million from $57.1 million after excluding various onetime gains, credits, charges and losses that reduced after-tax income by a net of $1.35 million in fiscal 2002 and by $12.2 million in fiscal 2001.
Although the share of pre-tax income for the middle three quintiles declined, lower effective tax rates and robust income growth resulted in higher average after-tax income in 1997 than in 1979.
Sponsored by SPI's Financial Management Committee, the 39th annual survey of SPI member processing companies measures financial and operating ratios such as assets and liabilities, net sales, pretax and after-tax income, cost of sales, overhead, depreciation, inventory, and administrative expenses.
Consumer Expenditure Survey data from 1960 to 1996 are used to examine trends in real consumption, real after-tax income, market work time, and real after-tax wages for single-earner and dual-earner households.