Question

Omar and Janet are also trying to forecast what their federal and state income taxes will be at the end of the year. If Rings and Things had a negative cash flow of –$150.00 per month from January through April, but a positive cash flow of $1,000.00 per month (after expenses) from May through December, on what dollar amount will they determine their income taxes? What expenses could be used for tax deductions?

Answer 1

Answer: This was the best answer I could come up with. Its probably wrong but whatever! :P  

They will determine their income taxes based on their positive cash flow of $1,000.00 per month. This is because this cash flow spans across more months than their negative cash flow of -$150.00 per month. Expenses that could be used for their tax deductions is sales tax.

Explanation:

Answer 2

Answer:

$7400

Explanation:

Taxable income is the portion of gross income that is subjected to tax. To arrive at this , necessary deduction like tax deductible expenses are deducted from the gross income. Moreover , the gross income is the aggregated overall  income over the months of the year.

Year end losses can be carried forward to offset income tax in subsequent years.

Tax deductible expenses are business expenses that are exempted from tax. Examples are pension plans , health insurance ,club membership . education assistance ,life insurance and lunch