How much did Gokhale Method pay in taxes in 2023?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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Income Taxes
The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the net income or loss of the Company is allocated to the respective stockholders and included on their individual tax returns. Therefore, no provision or liability for federal income taxes has been included in the financial statements. The California annual tax for S corporations is the greater of 1.5% of the corporation's net income or $800, which is reflected in the current year expense as incurred. GMI files a consolidated tax return with Gokhale Method Enterprise, Inc.
The Company accounts for income taxes in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740, Accounting for Income Taxes, which requires an asset and liability approach for accounting for income taxes. Deferred taxes are provided for accumulated temporary differences due to basis differences for assets and liabilities for financial reporting and income tax purposes. The Company did not have any temporary differences resulting in deferred tax assets or liabilities for the year ended December 31, 2023.
U.S. GAAP provide accounting and disclosure guidance about positions taken by an organization in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken by the Company in its State corporate tax returns are more likely than not to be sus
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, Gokhale Method Institute, Inc. elected to be taxed under Subchapter S of the Internal Revenue Code. Because of this election, the net income or loss is allocated to the stockholders and included on their individual tax returns; therefore, the financial statements do not include a provision or liability for federal income taxes.
The document states that the California annual tax for S corporations is the greater of 1.5% of the corporation's net income or $800. This amount is reflected as an expense in the current year as incurred. Gokhale Method files a consolidated tax return with Gokhale Method Enterprise, Inc.
The FDD also states that the company did not have any temporary differences resulting in deferred tax assets or liabilities for the year ended December 31, 2023. Management believes that all of the positions taken by the company in its State corporate tax returns are more likely than not to be sustained upon examination.