What's the difference between pretax and post-tax in very simple terms?

2021-04-04 3:15 am
I'm new to learning finance as a teen and I wanted to know what pretax and post-tax mean please. What's better for a business? Thanks! 

回答 (4)

2021-04-04 2:37 pm
Pre-taxed money is money you have earned that has not yet had taxes taken out of it yet.  Post-taxed is money you have earned that has already had taxes taken out.
2021-04-06 6:32 pm
Pre tax profit means the profit the business makes before deducting tax. Post Tax is the profit after deducting tax.

Pre tax profit 100
Less tax 30
Post tax profit 70
2021-04-04 3:35 am
“Pre” means before. “Post” means after.

In the simplest way to think of it, something that is pre-tax is facing taxes in the future...it is “before taxes”...and is taxed after the money moves.

Post-tax is the opposite: the money is taxed first, it is “after taxes have been taken”...and faces no more taxes after the money moves.

For example, a retirement account.  Pre-tax accounts have deposits that go in without any tax being taken out.  Those deposits are “pre-tax,” the money hasn’t yet been taxed. The withdrawals are taxed as they come out of the account.

Post-tax accounts have taxes taken out of the deposits right away, and that means all future withdrawals are tax-free.

You can see the advantages if you think taxes will be much higher in the future.  Pay taxes now (post-tax) at the lower rates, so when taxes are higher down the road, your withdrawals won’t be affected.
2021-04-04 3:21 am
Pre-tax:  Money earned prior to taxes being paid (often referred to as Gross Income)
Post-tax:  Money left after taxes have been paid. (often referred to as Net Income)

This doesn't really apply to your question of 'better for a business'.  It more has to do with referencing your earnings or income.


收錄日期: 2021-04-11 23:33:35
原文連結 [永久失效]:
https://hk.answers.yahoo.com/question/index?qid=20210403191521AA3AWp3

檢視 Wayback Machine 備份