Question

Do you think that income tax allocation can improve the prediction of future tax payments in the short run?

Answer 1

In my opinion income tax allocation can surely improve the future tax payments prediction in the short run. Future Income taxes are income taxes deferred due to the discrepancies between net income recognized and reported for tax on financial statements. An income tax allocation means the distribution of income tax expense among accounting periods; and research reveals that these methods where deferred taxes are considered provide better results than those which don’t.