Question

Total income tax expense for a corporation consists of:___. select answer from the options below

a. deferred tax expense only.
b. current tax expense and deferred tax expense.
c. current tax expense only.
d. the deferred tax asset minus any deferred tax liability.

Answer 1

The total income tax expense for a corporation consists of both current tax expense and deferred tax expense.

Step-by-step explanation:

The total income tax expense for a corporation consists of both current tax expense and deferred tax expense.

In other words, it includes both the taxes that need to be paid in the current tax year and any taxes that will be paid in future years due to temporary differences between accounting income and taxable income.

For example, if a corporation records a revenue in its financial statements for accounting purposes, but that revenue is not yet taxable under tax laws, then the corporation will have a deferred tax expense that represents the taxes it will have to pay on that revenue in the future.

Therefore, the correct answer is b. current tax expense and deferred tax expense.