Does the nondeductible portion of meals expenses result in a permanent or temporary tax difference?
Expenses for meals will be deductible up to 50% (may vary based on current tax legislation) of the expense for calculating taxable income but will be entirely recognized (100%) as an expense when calculating net income for financial reporting purposes. Therefore, this will always result in a permanent difference unless the tax law changes.
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Are fines, bribes, or kickbacks considered a permanent or temporary tax difference?
Fines, bribes or penalties resulting from the violation of laws and regulations will be recognized as expense items for calculating net income but will not be included as deductible for calculating taxable income. That means this item is considered a permanent difference.
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Do life insurance proceeds on an officer’s life insurance policy result in a permanent or temporary tax difference?
Life insurance proceeds from the death of an executive or corporate officer will be included for calculating net income on the financial statements but will be excluded when calculating taxable income. Therefore, this item will always result in a permanent difference.
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Is tax-exempt interest a permanent or temporary difference?
Differences that result from interest income being earned from an investment made in state or municipal bonds. represents a permanent difference. These income items will be included in calculating pretax income for financial statement net income but will be excluded for calculating taxable income. That means that this is an example of a permanent difference.
Are fines, bribes, or kickbacks considered a permanent or temporary tax difference?
Fines, bribes or penalties resulting from the violation of laws and regulations will be recognized as expense items for calculating net income but will not be included as deductible for calculating taxable income. That means this item is considered a permanent difference.
Do life insurance proceeds on an officer’s life insurance policy result in a permanent or temporary tax difference?
Life insurance proceeds from the death of an executive or corporate officer will be included for calculating net income on the financial statements but will be excluded when calculating taxable income. Therefore, this item will always result in a permanent difference.
Is tax-exempt interest a permanent or temporary difference?
Differences that result from interest income being earned from an investment made in state or municipal bonds. represents a permanent difference. These income items will be included in calculating pretax income for financial statement net income but will be excluded for calculating taxable income. That means that this is an example of a permanent difference.
