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    #1

    What would you do?

    I have decided to have the client pay the additional money as I don't want to take chances rather than reduce an expense to come under the threshhold..

    Situation: In NYS, there's a sliding scale based on gross receipts for NYS corporation tax.
    Up to $ 100,000 it's $ 25, more than $ 100,000 to $ 250,000 it's $ 50 and so forth.

    A client has $ 100,014 in gross receipts.

    What would you do?

    This is NOT a hypothecal case - it's real.
    Uncle Sam, CPA, EA. ARA, NTPI Fellow
    Tags: None
    #2
    That's why they have brackets. Sometimes you win, sometimes you lose.
    "The only function of economic forecasting is to make astrology look respectful" - John Kenneth Galbraith

    Comment

      #3
      Ok, huh?

      How would reducing an expense change gross receipts?

      Sorry, it has been a long day, but I am not following that one.
      If you loan someone $20 and never see them again, it was probably worth it.

      Comment

        #4
        Gross Receipts vs. Sales

        Rita, suppose the "gross receipts" included the refund of an overcharge
        from the electric company for $90. Considered "gross receipts" only because
        the check was deposited.

        Technically, this is not an increase in sales, but a reduction of an expense.
        If Uncle has such a situation and it really is a Non-Sale, I think I would reclassify
        just on its merits from accounting treatment.

        I would not reduce a "real" sale just to avoid the threshhold.

        Comment

          #5
          Ok. I think.

          So, we are reducing the other guy's expense. Not our own. Got it. Prob.
          If you loan someone $20 and never see them again, it was probably worth it.

          Comment

            #6
            I think we're all in agreement

            I think we'd all look at (or in my case have the Accountant look at) whether the number for gross receipts could legitimately be reduced by 14 bucks. As Snags pointed out there are cases where things that don't have to be part of gross receipts get thrown in there.

            At the same time, brackets do like this at times and we are stuck with them.

            In particular I don't think $25 extra is worth a fight over so I wouldn't cut that amount of tax out by doing anything that in my best judgment might be lost at audit.

            Comment

              #7
              I think we have all had cases where the individual tax liability on a tax return was $1 or $2 "over" the bracket amount, causing an additional amount of tax that exceeded the excess income. I hate it when that happens, but..... Ce la vie!

              Comment

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