What was the total deferred federal income tax benefit for 1 800 Packouts in 2021?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
basis based on revenues. The Company made payments of management fees of $1,613,745 and $1,344,448 for services rendered during the year ended December 31, 2022 and for the period from inception (April 9, 2021) through December 31, 2021, respectively.
The Company provides call center and other management services to another franchisor that is under common ownership. Additionally, the Company incurs certain expenses on behalf of that related franch
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the total deferred federal income tax benefit for 2021 was $408,225. This figure reflects the deferred portion of the federal income tax benefit, as opposed to the current portion.
Deferred income taxes arise from temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements. These differences result in taxable or deductible amounts in future years when the related assets are recovered or liabilities are settled. A deferred tax asset represents the increase in taxes refundable (or decrease in taxes payable) in future years as a result of deductible temporary differences or carryforwards. Conversely, a deferred tax liability represents the increase in taxes payable (or decrease in taxes refundable) in future years as a result of taxable temporary differences.
For a prospective 1 800 Packouts franchisee, understanding these figures is crucial for assessing the financial health and tax strategies of the company. While deferred tax benefits can be a positive indicator, it's important to consider the underlying reasons for these deferrals and their potential impact on future tax liabilities. Consulting with a financial advisor is recommended to fully understand the implications of these tax benefits.