corporate tax rate

flat rate a C corporation pays from its tax base

deferred tax asset

current resource owned and created when the tax is paid in advance

deferred tax liability

debt created as a result of the difference between financial statement income and taxable income


process of allocating the cost of a fixed asset to an expense account over the life of the asset

earnings before interest and taxes (EBIT)

profit associated with operations

gross margin

total amount received from gross profit divided by sales

gross profit

sales minus the cost of goods sold

marginal tax rate

rate an individual will pay in each of the applicable tax brackets

net income

receipts left after all expenses have been deducted


amount left over from total receipts or revenue once total cost (however defined) is subtracted


net sales or total receipts

tax arbitrage

process of using differences in tax codes to make a profit

tax base

total income and assets on which the tax rate will be applied to determine the tax liability

tax credit

dollar-per-dollar allowance against the tax liability

tax deduction

reduction to taxable income, which in turn reduces the tax base

tax table

list of marginal tax rates published by the IRS or the tax authority of the applicable country

taxable income

revenue minus deductible expenses; amount on which the tax liability will be calculated