Federal Income Taxes

One of the most important overall financial considerations for any company is Federal Income Taxes. For a property-liability insurance company, taxes are both important and, to a large extent, controllable. Whereas the income of most organizations is fully taxable, insurance companies' income is largely investment income which can be either taxable or tax exempt. This paper explores the subject of Federal Income Taxes and it illustrates how net income can be maximized by minimizing Federal Income Taxes. Because mutuals and life insurance companies fall under different sections of the tax code, they will not be included in this paper.