Temporary Difference or Permanent Difference
Fines and Penalties
Permanent Difference
Book Income = 75k
Fines & Penalties = 5k
Tax Depreciation = 10k
Book Depreciation = 5k
Taxable Income = 75k
M-3 must be filed when the total assets at the end of the year is over ____
10 million
Tax Depreciation is greater than Book Depreciation
Favorable
Meals is ___ deductible
50%
Federal Income Tax
Permanent Difference
Book Income = 25k
Tax Depreciation = 5k
Book Depreciation = 7k
Meals = 10k (Total)
Taxable Income = 32k
Part I
Club Dues
Unfavorable
This is the Retained Earnings Roll Formula
Beginning RE + Book Income + Contributions - Book Loss - Distributions = Ending RE
Gain/Loss of Disposal
Temporary Difference
Tax Income = 120k
Tax Depreciation = 50k
Book Depreciation = 25k
Political Contributions = 5k
Entertainment = 2k
Book Income = 138k
Part I of the M-3 reports the ___ income
Book
Tax-Exempt Interest Income
Favorable
Bonus Depreciation in 2024 is ___ deductible
60%
Non-Political Charitable Contributions
Temporary Difference
Book Income = -20k
Officer's Life Insurance = 5k
Tax gain on disposal = 3k
Book gain on disposal = 6k
Taxable Income = -18k
These are four columns of the M-3 Part II and III
Income/Loss per Income Statement
Temporary Difference
Permanent Difference
Income/Loss per Tax Return
Accrual to Cash Adjustment
Either :)
In GoSystem, if your Taxable Income is correct but your book income is wrong, this needs to be fixed
M-1 Adjustments
Stock-Based Compensation
Either :)
ISO = Permanent Difference
NSO = Temporary Difference
Tax Income = 10k
Book Depreciation = 50k
Tax Depreciation = 25k
Federal Income Tax = 2k
This is the form where COGS, Interest Income and Interest Expense is reported in regard to M-3
Form 8916-A
Foreign Related Interest Expense (Accrued)
Unfavorable
Name the 3 informal trainings so far
Soft Skills, QBI/163j, and Retained Earnings