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I don't know about the US tax system, but at least in my experience here in Australia, not every expense incurred by a business or partially-taxed non-profit is
by ajdlinux 6y ago
I don't know about the US tax system, but at least in my experience here in Australia, not every expense incurred by a business or partially-taxed non-profit is necessarily deductible. For example, I formed a company with some friends for the purpose of work on a single contract, and the expenses we incurred in incorporating the company were only deductible at a rate of 20% per year over 5 years, so we ended up having to pay tax without being able to deduct most of that particular set of expenses during the 1 year we were in operation.
- MaximumYComb 6y agoThats for items which depreciate in value over a multi year period right? I know that you were only in business one year but the tax system isn't really designed around 1 job incorporated companies.
- hestefisk 6y agoThat’s depreciation on capitalised assets. Churches would like have very few assets that depreciate apart from buildings.
- ajdlinux 6y agoCapital expenses, not depreciating assets. In any case, my broader point is that tax law for businesses and other taxable organisations is not as simple as "we didn't make a profit and therefore pay no tax this year", and therefore as someone who isn't a qualified tax accountant, I can't really say with much accuracy what impact particular changes to tax law are going to have on the overall financial position of an organisation like a church.
- kshacker 6y agoOne of the companies I used to work for - the joke was they are a land acquiring company under the guise of technology. They did tech too and made a lot of money, but they made decent sum from land too. Same may be going on for churches too.