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Provision for income tax refers to the line item in the profit and loss statement. Income tax is a broad term and could mean current taxes (taxes actually payable to Government), Tax expenses/provision for tax- taxes reported in the P&L or deferred taxes (difference between current taxes and tax expense).
What else can I help you with?
Entry for Provision for Income Taxes?
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
What if income tax provision is higher than deferred income tax?
You may not understand what your asking, in provision and "tax" are 2 different things. Provision is a purely accounting (GAAP) term. it has nothing to do with IRS tax really. It isn't even part of IRS vernacular really. An Income Tax Provision basically has 2 components; Deferred Tax Provision & Current Tax Provision. (Some ancillary accounting lines may have to do with credits and tax effect of state tax deduction for example). The total income tax provision is the combination of the 2. If current tax provision is higher than deferred tax provision, than the deferred tax provision is a tax benefit. A very common thing that happens when tax accounting requires a provision be recorded for income recorded for GAAP before it is income for tax.
Difference between income tax act and income tax rule?
The income tax act focuses its concern on total income and the income tax rule focuses on which types of income are taxable. That is the biggest difference between the two.
How you Calculate Provision for Income tax?
how to calculate provison for income tax
Is Intraperiod tax allocations a Permanent Difference or temporary Difference?
When we talk about Permenent difference or temporary difference, we actually mean Interperiod Tax allocation. Intraperiod tax allocation involves apportionning the total tax provision for financial accounting purpose in a period between the income or loss from: Income frm continuing operation, Discontinued operations, Extraordinary items, Cumulative effect of accounting change, and other comprehensive income.
What is the accounting entry for the Provision of Income Tax?
dr. income tax expense cr. income tax payable
What is the difference between income tax expense and income tax payable?
Income statement & balance sheet.
Whats the difference between tax free income and taxable income?
You pay tax on taxable income and you don't on tax free income
How do you treat over or under provision of income tax?
Best way to understand is through an example: If in 2010 you have a provision for tax of $2,000 payable for accounting. However the actual tax paid was $1,500. You would have an over provision of income tax. So once the tax is paid in 2011 it will Dr Provision Cr Bank. So in 2011 the amount of the over provision must be adjusted by: Dr Provision for tax Cr Income tax expense This will clear out the tax provision for 2011 resulting from the over provision. Same concept applies to under provsions.
What is difference between tax free and taxable income?
You don't pay tax on the tax-free pay and you do pay tax on taxable income
What is the difference between Accrued income tax and deferred income tax?
we dont have an idea either. thanks wharton
What is the difference in tax rates between k1 income and 1099 income?
The difference in tax rates between K-1 income and 1099 income is that K-1 income is typically taxed at the individual's personal tax rate, while 1099 income is subject to self-employment taxes in addition to income taxes.
