标题: some advice on taxes FSA [打印本页] 作者: ikoreaii 时间: 2011-7-11 17:41 标题: some advice on taxes FSA
a couple of things to remember, their application helps with the deferred tax assets / liabilities.
you have revenues and expenses to deal with, in general, keep that in mind and memorize:
revenues - TAX > BOOK = DTL
expenses - TAX > BOOK = DTA
to interpret this, if you have higher revenues on your tax return than book (under GAAP), it is a DTL since you paid out more taxes to the IRS, but did not recognize them on your books, this means that in the FUTURE you will have to recognize these taxes on your books, so it is a future taxable amount and therefore a deferred tax liability.
for expenses, it is the opposite - you took a deduction on your taxes and not on your books, so you will be able to DEDUCT in the future years (on your books), and a future deduction is a deferred tax asset.
now here is the fun part - if you ever have to switch the greater than (>) sign in the 2 equations above, you must switch the DTL to DTA and vice versa.
so it turns into:
revenues - TAX < BOOK = DTA
expenses - TAX < BOOK = DTL
you just switch them. intuitively, say you post earnings on your financial statements, like having a sale and recording it with a payment in accounts receivable instead of in cash, the tax code says wait until you get paid the cash to pay taxes on it, but GAAP lets you recognize the sale on your books, and therefore you have an income tax expense. you know have an asset on your (GAAP) books that you can use to reduce future tax payments to the IRS. OR if you recognize a big depreciation write off on GAAP, but the IRS does not let you deduct it as quickly. Well you already took the deduction on your books, so you have to recognize that you will have a future obligation to pay these taxes to the IRS.
its all about when things hit your books, compared to when they hit the tax return.
using this framework, i believe it is much easier to approach the type of deferred tax problems we will see on the exam.
