The answer is no.A contra account to the "Income Tax Benefit (Deferred)" would be a "Income Tax Charge (Deferred)".
This is in accordance with Generally Accepted Accounting Principles, SFAS No. 109, "Accounting for Income Taxes". The theory is that even if you don't owe tax today on a given temporary difference, you will one day owe (or get the tax benefit) of said temporary difference. Remember: current tax expense= your tax bill this year deferred tax expense/ benefit=your future tax expense or benefit on the book/tax temporary items
You will need two accounts: Income tax expenses (an expense account, obviously) Provision for income tax (a liability account) You will simply: debit provision for income tax credit income tax expenses When actually paying income tax, you will: debit cash credit provision for income tax
i think as a pre operating expense, that is, an asset account.
Yes. Depending on the specifics, it may or may not be a TAX DEDUCTIBLE expense, but it is most certainly an expense. (For example, your (or a Cos) state income tax is an expense, it pays it, its bottom line - the money it has to give to its owners is lowered by it), but and it is a deduction (or expense) against FEDERAL taxable income. But it is noot an expense in calculating the income you pay the State Tax on. Just like the Federal tax is NOT an expense (deduction) you can use to calculate the State Taxable Income on.
The answer is no.A contra account to the "Income Tax Benefit (Deferred)" would be a "Income Tax Charge (Deferred)".
This is in accordance with Generally Accepted Accounting Principles, SFAS No. 109, "Accounting for Income Taxes". The theory is that even if you don't owe tax today on a given temporary difference, you will one day owe (or get the tax benefit) of said temporary difference. Remember: current tax expense= your tax bill this year deferred tax expense/ benefit=your future tax expense or benefit on the book/tax temporary items
You will need two accounts: Income tax expenses (an expense account, obviously) Provision for income tax (a liability account) You will simply: debit provision for income tax credit income tax expenses When actually paying income tax, you will: debit cash credit provision for income tax
Tax is an expense on financial statements. However, income tax is an expense of the year in which the income was earned, not the year the tax is paid. For instance, income tax paid in 2013 for income earned in 2012 is an expense for 2012. You do not deduct as a 2013 expense the income tax paid in 2013 for earnings in 2012.
Accrued income tax (Income Tax Payable) is a current liability. When the tax is actually paid it is reported on the income statement as Income Tax Expense.
i think as a pre operating expense, that is, an asset account.
Yes. Depending on the specifics, it may or may not be a TAX DEDUCTIBLE expense, but it is most certainly an expense. (For example, your (or a Cos) state income tax is an expense, it pays it, its bottom line - the money it has to give to its owners is lowered by it), but and it is a deduction (or expense) against FEDERAL taxable income. But it is noot an expense in calculating the income you pay the State Tax on. Just like the Federal tax is NOT an expense (deduction) you can use to calculate the State Taxable Income on.
dr. income tax expense cr. income tax payable
Income statement & balance sheet.
Debit: Income tax expense Credit: Income tax payable
If I understand what you are asking, your question is in regards to C corporations or LLCs which have elected to be taxed as C corporations, and which use the accrual method of accounting. The income tax expense for the period would be listed as an expense on the income statement. The amount of unpaid income tax would be listed as a liability on the balance sheet as income tax payable (or some similar name).
Taxes are payable on income less expenses