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Let me explain my question: Lets say I put $60,000 into alpaca farming, I realize I get to deduct that $60,000 off other income and so save roughly $20,000 on income taxes but then I have to sell my alpacas or the wool for at least $40,000 to just break even. That doesn't take into account the time value of my money or any personal labor devoted to the enterprise. I don't think alpaca wool is that valuable is it? Everyone says it is a great way to make money because of the tax write offs but I don't see it....
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∙ 8y ago
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Principles of a good tax system?
The principles of good tax system is that it is efficient, understandable and equitable. The benefit principle is also another principle of a good tax system.
Whether unrecognized tax benefits is a tax portion?
An unrecognized tax benefit is the difference between the tax benefit reflected on the income tax return and the amount of the benefit recorded on the financial statements. Example: taxpayer deducts $100 on its return but believes that a $60 deduction will be the most likely outcome in a negotiated resolution with the IRS on audit. The $40 difference is the unrecognized tax benefit.
Is a income tax benefit account a contra account of income tax expense?
The answer is no.A contra account to the "Income Tax Benefit (Deferred)" would be a "Income Tax Charge (Deferred)".
What is a tax trap?
A tax trap is a tax law provision that can result from a taxpayer's loss of an otherwise available tax benefit from a transaction.
Why is the tax expense reported on the income statement comprised of current and deferred tax?
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
Principles of a good tax system?
The principles of good tax system is that it is efficient, understandable and equitable. The benefit principle is also another principle of a good tax system.
What is the tax benefit of a car donation?
Not everyone can get a tax benefit and if you do the amount can vary.
The governments benefit from a tax can be measured by?
tax revenue
Whether unrecognized tax benefits is a tax portion?
An unrecognized tax benefit is the difference between the tax benefit reflected on the income tax return and the amount of the benefit recorded on the financial statements. Example: taxpayer deducts $100 on its return but believes that a $60 deduction will be the most likely outcome in a negotiated resolution with the IRS on audit. The $40 difference is the unrecognized tax benefit.
Is a income tax benefit account a contra account of income tax expense?
The answer is no.A contra account to the "Income Tax Benefit (Deferred)" would be a "Income Tax Charge (Deferred)".
How do tax payers benefit from paying taxes?
Individuals benefit from state services.
Should I ask my tax professional if they will pay for any errors on my taxes?
Part of the benefit of paying a tax professional is that he or she signs off as the preparer of the tax filing and will stand by the filing if it is questioned. Keep in mind that the tax preparer is only as good as the information you submit.
What is tax trap?
A tax trap is a tax law provision that can result from a taxpayer's loss of an otherwise available tax benefit from a transaction.
What is a tax trap?
A tax trap is a tax law provision that can result from a taxpayer's loss of an otherwise available tax benefit from a transaction.
Why is the tax expense reported on the income statement comprised of current and deferred tax?
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
What did Mycenaean's pay the tax's in?
livestock farming and other goods to the king
Who pays child benefit?
We do simply by paying tax!
