Over the last five years, corporation A has been consistently profitable. Its earnings before taxes were as follows: Year Year 1 Year 2 Year 3 Year 4 Year 5 Earnings 1,000 3,000 4,300 5,200 4,400   If the corporate tax rate was 25 percent, what were the firm’s income taxes for each year? Unfortunately, in year 6 the firm experienced a major decline in sales, which resulted in a loss of $10,800. What impact will the loss have on the firm’s taxes for each year if the permitted carry-back is two years?

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Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.