IRS Redesigning Taxpayer Notices to Make Them Easier to Understand

WHAT IS TAX ABATEMENT?

Most residential and commercial property buyers are always on the lookout for programs that can ease their financial burden. One such program is tax abatement. This tax program offers buyers an incentive that’s hard to resist. It allows them to enjoy reduced property taxes or long-term breaks on their property tax bill. Either way, they get to save money, which undoubtedly impacts their bottom line, but in a positive way. However, this program is only offered by specific states and cities, so it’s wise to do some research. With that out of the way, let’s learn more about tax abatement - what it is, how it works, and its benefits.

HOW TO CALCULATE PRETAX INCOME

US companies are required to pay taxes on their profits to the Internal Revenue Service (IRS) each year and follow Generally Accepted Accounting Principles (GAAP).

Reporting profits and income in financial statements and tax returns is not always the same. This is due to each body having its own rules governing how to calculate income. Furthermore, businesses may use different accounting methods for tax returns and income statements.

In this article, we explore pretax income, how it is calculated, its difference from taxable income, and why it is essential to know how to calculate it.