Question

shane starts a new business this year and incorporates the business entity as snb, inc (taxed as a c corporation). unfortunately, snb, inc. has a slower than expected start and loses $6,800. assuming a 21% income tax rate, how much income tax will snb, inc. pay this year?

Answer 1

After assuming a 21% income tax rate, SNB Inc  will not pay taxes this year since it earned a loss. It most likely has the option to carry the loss over to a subsequent year to offset income.

What is Income tax?

Income tax is a type of direct tax that governments impose on the earnings of their constituents. The central government must levy this tax, according to the Income Tax Act of 1961. In its Union Budget each year, the government has the authority to alter the tax rates and income brackets. Income does not just refer to funds received in the form of wages. It also includes "revenue from other sources," which includes income from real estate, corporate earnings, professional gains (such as bonuses), and income from capital gains.

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