Definition: Mortgage 45 of net income refers to a tax credit or deduction that a company receives for every dollar they earn in profits from selling their products or services. This can be a significant financial benefit for companies, as it can help offset some of the costs associated with operating and growing a business. The term "mortgage 45" comes from a common phrase used by accounting firms to refer to this type of tax credit. It means that the company pays an additional 45% tax on any net income generated, regardless of whether it is earned or not. This can be particularly beneficial for companies with high levels of profits and expenses. For example, if a company earns $10 million in profits and has to pay taxes at a rate of 20%, the net income they earn would be $8 million. If they then receive a tax credit of 45% on this amount, the company can claim back $360,000 in federal income tax as a deduction from their gross income.
You've scored 50% OFF Factor 🤤
Forget the empty fridge stare-down. Factor delivers fresh meals to your door. Just heat & eat!
Click to sign up for FACTOR_ meals.