Accounting For Income Taxes

SG Inc CPA > Accounting For Income Taxes

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SG INC CPA is a private business firm which provides accounting for income taxes services. We have been in the market for more than a decade. Our experience is a witness of our excellence. We provide top notch services to a vast client base. Each and every customer is ensured of our excellence by the evident flawless services. We are ever growing and ever expanding. We live and operate by the principle that; complacency leads to stagnation. Our accounting for income tax in Texas operates upon this ideal.

A satisfied customer is a happy customer.

Customer satisfaction is one of the basic principles with which we operate. Many of our customers were skeptical at first when contacting us for accounting for income taxes. But overtime they have come to view us as reliable. This allowed our existing client base to contact their own friends and family who could benefit from our cheap and quality service as well. Thus, creating a hegemony which has continued to expand over time.

Our increasing contacts, influence and reach in the market has allowed us to create a portfolio of the best companies in the market. These companies come in all sizes ranging from small to upper-middle category. We are especially pay special attention to the start up businesses, even if they are very small n stature. A startup allows us to design it all according to our standard specifications. This makes the business organization and operations management extremely smooth. Timely intervention from a responsible accounting for income taxes services carries several infringe benefits.

Understanding Income Tax

Income Tax is a government sanctioned duty which is imposed on the profits earned by an individual or a corporation. Income tax services are offered universally, as income tax is universal in its imposition. Every citizen must pay it one way or another. Most individuals or corporations prefer to hand over this headache to accounting for income tax services.

In such a case when an individual or a corporation fail to file or pay for their due taxes, they are likely to be imposed with certain liabilities by the relevant tax authority. The individuals or corporations may lobby for the extension of deadlines on the payable taxes, so they would have to pay it at a later and more convenient time to the relevant tax collection agency. Liabilities can be avoided by hiring an appropriate income tax service. Liabilities can be triggered by a number of reasons, such as;

  • Realization of Operating Income
  • Receipt of Inheritance
  • Sale of Assets

Understanding Accounting for Income Taxes

The Accounting for Income Taxes in a timely manner allows taxpayers to recognize and avoid the imposition of tax liabilities that may be levied against them or their corporation by a tax agency, such as, IRS. It also helps in determination of the tax expenses for the running fiscal period. Revenues or monetary gains that are deemed taxable either prior to the recognition in financial statements, or after it, are all deemed accountable in this process. Accounting for income tax services are the ones who understand these problems but also how to settle them.

There are concepts that must be understood properly if an interested party wishes to gain a deeper understanding of accounting for income taxes. These concepts are necessary to the proper recognition, understanding and comprehension of several terminologies and procedures that are part of it. they are following;

Accounting For Income Taxes

We can be your reliable partner as a bookkeeper, accountant and business advisor to deliver you a full range of bookkeeping and accounting services.



I went to SG INC CPA for Accounting for Income Taxes needs. It was advertised as an all stop shop. Originally, I thought it was merely a marketing campaign. But they did complete all my requirements. Their boasts are not empty. Their employees are all knowledgeable in their chosen fields. This mastery allows them to complete all the work given to them within expected deadlines and expectations


I am very happy with the services I received at SG INC CPA. Asim provided me with specialized services to fulfill all my requirements. He and his team managed the Accounting for Income Taxes service for me. They did my accounting, as well as management. I have personally vouched for Asim to several of my colleagues and acquaintances. Every one whom I have referred to him is also very happy with the services they receive.


While working with them, I have realized that I am in good hands. When I opened my small pizza franchise, I used to do all Accounting for Income Taxes by myself. It was a tedious process and gradually became harder for me since I have never had any formal training in it. At a friend’s advice I directed all my accounting work towards them. They proved my apprehension was for nothing.

1. Temporary Differences

A business organization might record an asset or a projected liability at one value for the financial reporting purposes, while simultaneously maintaining separate records for the tax purposes, which carries an entirely different value. This difference is caused by the tax recognition policies created by relevant taxing authorities. Its purpose is they may require the deferral or the acceleration of certain class of items for the tax reporting purposes. The differences, however, are only temporary. They will inevitably be settled when the assets are recovered and the ensuing liabilities settled. Such difference which can result in the imposition of taxable amount at a later date is called taxable temporary difference. While another type of difference, which results in a deductible amount at a later date is called deductible temporary period. It must be noted that financial statement audit cannot be conducted until these differences have been resolved effectively.

View following examples of temporary differences;
A. The revenues that are taxable either before or after their recognition in financial statements. For instance, an allowance for doubtful accounts may not be immediately tax deductible, but instead might be deferred temporarily until specific receivables are declared as bad debts.
B. Such Expenses or Losses that are tax deductible either before or after they are recognized in the financial statements’ analysis count as temporary differences. For Instance, some fixed assets are tax deductible, but can only be recognized through long-term depreciation i.e. temporary differences.
C. There are certain assets which are reduced in tax basis by investment in the tax credits. They could count as temporary differences.

2. CarryBacks and CarryForwards

A company may find itself in a position where it has more tax deductions or tax credits stored up than it can possibly use in a single fiscal year’s tax return to offset the losses levied when being burdened with liabilities by the respective tax agency. In such situation, said company carries the option of offsetting these credits and deductions for their monetary value against the taxable income or liabilities of tax returns in earlier or later time periods, as they think it suitable. Since the company always has the option of applying for tax refunds, by carrying these amounts back to tax returns would prove to be more valuable. That is why the excess tax deduction or credits are usually carried back, while the remaining amount is held in reserve for future usage.

CarryForwards tend to expire if they are not utilized within a limited time frame. A company must recognize a receivable against an amount of taxes paid in prior years that have been deemed refundable because of a CarryBack. Any tax asset which has been deferred can be realized for CarryForward. However, it can also offset valuation allowance based on probability that some portion of CarryForward will not be realized. Since they can easily advise you to offset such unnecessary headaches, it is advisable to hire an income tax service near you.

3. Deferred Tax Liabilities & Assets

The deferred tax liabilities take place on deferred tax assets due to the presence of temporary differences. They represent potential changes in future periods for taxes payable or refundable.

These above-mentioned factors can give out quite complex calculations for the relevant party to estimate the appropriate income tax information for recognition and reporting in the relevant financial statements’ analysis or reports.

Essentials in Accounting for Income Taxes

There is an inherent complexity in calculation and manipulation of income taxes to the taxpayer’s preference. However, the essential accounting in this area is derived from the need to recognize two basic particulars, which are;

  • Current year. The recognition of a tax liability or tax assets on the basis of estimated amount of income taxes payable or refundable for the running fiscal year.
  • Future years. The recognition of a deferred tax liability or tax assets on the basis of estimated effects of CarryForwards and temporary differences in the future years.

Based on the preceding points, the general accounting for income taxes is in following steps;

  1. Create a tax liability for estimated taxes payable, or create a tax asset for tax refunds in connection to the current or previous years.
  2. Create a deferred tax liability for the future taxes payable, or create a deferred tax asset for future tax refunds that can be attributed to temporary differences and CarryForwards.
  3. Calculate Total income tax expense to be paid.

SG Inc. CPA offers Accounting for income taxes service in Texas and California. We have complicated accounting requirements which prompt us to draw up everything from the basic financial statements to compilations, analysis and reviews. We also provide sales tax services. We make a habit to take the time to thoroughly review all your data with you throughout the fiscal year to offer insight. We help you understand where the numbers come from and what they represent. Our financial analysis, income tax services, sales tax services and so many more will prove as necessary to the rise of your business to success and driving all your competitors into the ground.

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Best Bookkeeping Service

At SG INC CPA we hire and train the best in the field of bookkeeping staff and associates. We maintain our supremacy as the best bookkeeping service in Texas by our dedication and hard work.Our expert senior managing accountants and bookkeepers are accessible to every client if they wish to work with them every step of the way.

Financial Statements Preparation

Financial statements preparation and reporting is a large part of what the bookkeepers actually do. a business owner that values ambition and desires for growth, must put the numbers to work. A good financial statement preparation service will provide those numbers with advice on how to achieve that ambition.

Cash Flow Management

Cash Flow problems are faced by businesses which possess a diverse range of operations reaching more than a single locale or spectrum. It is certainly a good thing when a business grows enough to start generating large amounts of profits, or the expansion causes the activity in the business to be extremely hyped.

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