What was the total income tax expense for Itan in 2023?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| Accrued payroll | $ | 4,743 | $ | 5,848 |
|---|---|---|---|---|
| Credit card payable | 100 | 42,852 | 25,551 | |
| $ | 47,595 | $ | 31,399 |
NOTE 8 CONTRACT LIABILITIES
The Company signed a ten year, non-refundable Area Development Agreement (ADA) in December 2023. Contract liabilities have been recognized for the full amount of the agreement of $115,000 as of December 31, 2023. The ADA is for
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company's income tax expense in 2023 was $99,689. This figure represents the total amount of taxes Itan incurred for that year, encompassing both current and deferred taxes at the federal and state levels. This expense is a significant factor in determining Itan's net earnings, as it is deducted from the income before taxes to arrive at the final profit figure.
Specifically, the income tax expense includes $64,194 in federal current taxes and $32,905 in state current taxes. Additionally, it accounts for $1,772 in federal deferred taxes and $818 in state deferred taxes. These deferred tax components reflect temporary differences between the book value of assets and liabilities and their tax bases, which will result in taxable or deductible amounts in the future.
For a prospective Itan franchisee, understanding the company's tax obligations is crucial for assessing its financial health and profitability. While franchisees are responsible for their own business's tax liabilities, the franchisor's financial performance can indicate the overall stability and success of the Itan system. Reviewing these figures over multiple years, as presented in the FDD, can provide insights into Itan's tax planning strategies and their impact on net earnings.