Income Tax Expense

The Straits Times  Feb 14  Comment 
February 14, 2014 10:24 PM Mainboard-listed Courts Asia has posted a 1.7 per cent rise in third quarter net profit to $6.3 million.  Jan 6  Comment 
Visit at for the full story.


Income Tax Expense is the total sum paid to the government as a tax on earnings

The Income Tax is found on a company's Income Statement and is subtracted from the company's Pre-Tax Income to obtain their Net Income. Investors often pay special attention to a company's income before applying the income tax expense as companies have a number of techniques available to them to minimize or avoid paying income taxes. As stated on the Income Statement, the income tax amount has not actually been paid - it is an estimate, or an account that has been created to cover what a company expects to pay.

Income taxes are imposed by the government on the annual gains of a person, corporation, or other taxable unit derived through work, business pursuits, investments, property dealings, and other sources as described by the federal, state, or municipal laws.


Company XYZ purchased $10 million worth of preferred stock that was paying a 10% yield. The company would receive $1 million a year in dividends on the preferred. However, if the company had an income tax expense rate of, say, 35%, $0.35 million will be collected by the government. As a result, only $0.65 million of the $1 million dividends will be what the company will receive.

Please install Flash Player to view this chart.
Please install Flash Player to view this chart.
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki