Differences between pretax financial income and taxable income in an accounting period that will not reverse in a later accounting period are called

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Permanent differences between pretax financial income and taxable income do not reverse in future accounting periods and therefore, require no deferred tax accounting. Examples of permanent differences include: tax-exempt income, interest on municipal bonds, fines and penalties not allowed as tax deductions, and life insurance premiums.

Differences Between Pretax Financial Income and Taxable Income in an Accounting