I'm pretty sure the answer to this must be yes, but I just want to be sure.
2007-03-25 19:04:03 · 3 answers · asked by Marcus 1 in Business & Finance ➔ Taxes ➔ United States
Corporations pay Federal Income Tax on net income. The IRS rules on deductiblity of business expenses sometimes diverges from GAAP standards so it's not unusual for a corporation to have 2 sets of books, one for IRS standards and one for GAAP standards.
State corporate taxes further muddle the issue with their own rules that differ from the IRS and the GAAP. Some states tax gross receipts, not net income and a few even tax both.
In most cases a corporation prepares its financial statements according to GAAP standards and presents net income before taxes at the botton of the P&L sheet and then deducts the income taxes after that. The specifics of the tax levies are then explained in the annual report.
2007-03-26 00:08:33 · answer #1 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Corporations pay tax on net income to the IRS. Some states tax gross revenue of a corporation.
2007-03-25 23:20:19 · answer #2 · answered by waggy_33 6 · 0⤊ 0⤋
well it may start out as gross...then there are deductions.....then taxable income or revenue. something like that.
2007-03-25 19:09:21 · answer #3 · answered by Anonymous · 0⤊ 2⤋