Your provision, computed from the ledger.
Aleq computes current and deferred tax expense from pretax book income and your recorded temporary differences — current with the books, not a quarter behind. The rate bridge builds itself line by line, and when a rate changes, every deferred balance remeasures with the catch-up posted.
The provision computes. The judgment stays yours.
Three moments in the same provision — computing it, weighing a valuation allowance, and absorbing an enacted rate change. Aleq runs all three; the allowance waits for your signature.
Aleq applies your recorded temporary differences to pretax book income and computes current tax expense and deferred tax expense — the two add up to the total provision and a single effective rate. It builds the rate reconciliation at the same time, line by line: federal statutory at the enacted rate, state and local, each permanent difference, each credit, the deferred component — so the bridge from 21% to your rate is a computed schedule, not a workbook.
Every difference, on one schedule.
Stock comp, §174 capitalization, accruals, depreciation, NOLs — each temporary difference creates a deferred tax asset or liability that reverses on its own timeline. Aleq tracks the cumulative book-tax difference and the deferred balance behind it, reconciled to the ledger every period.
| Difference | Cumulative | DTA / (DTL) |
|---|---|---|
| §174 R&D capitalization | $3,600,000 | $900,000 |
| Stock-based compensation | $2,590,000 | $648,000 |
| Accrued compensation | $560,000 | $140,000 |
| NOL carryforward | $5,200,000 | $1,300,000 |
| Depreciation | $(1,400,000) | $(350,000) |
| Valuation allowance | — | $(800,000) |
| Net deferred tax asset | — | $1,838,000 |
Federal, state, international, credits — one provision.
The provision is built from parts — federal, state, international, credits, carryforwards. Aleq computes each from the ledger and posts them on one schedule, so the effective rate is a result, not a reconciliation exercise.
Book income, bridged to the federal liability.
Aleq starts from pretax book income, applies your recorded permanent and temporary differences, and splits the result into current tax payable and the deferred movement — the federal current and deferred provision, computed from the ledger.
- Current tax on this year's taxable income.
- Deferred the change in net deferred balances.
- Return-to-provision your team's true-up when the return is filed.
Apportioned across every state you touch.
Each state with nexus needs its own apportionment, rate, and modifications. Aleq builds the state provision from the ledger: apportions by the factors each state uses, applies that state's enacted rate, layers the state add-backs and subtractions, and posts the state current and deferred lines beside the federal ones — one schedule, every jurisdiction, net of the federal benefit.
- Apportionment sales, payroll, and property factors per state, from the ledger.
- State rate each state's enacted rate, effective-dated, with its modifications.
- Net of federal state taxes deducted at the federal rate, on the same schedule.
Foreign earnings, GILTI, and the credits against them.
Foreign subsidiaries bring GILTI, Subpart F, and foreign tax credits into the provision. Aleq computes tested income by CFC, the GILTI inclusion net of the §250 deduction, any Subpart F income, and the foreign tax credit with its limitation — from the subsidiaries' books already on the ledger — and posts the international lines beside the federal ones.
- GILTI & Subpart F tested income by CFC; inclusions computed net of §250.
- Foreign tax credits computed with the limitation, tracked by basket, applied against the U.S. liability.
- One schedule international lines post next to federal, with each CFC's basis stored.
R&D credits computed, §174 capitalized, both posted.
The research credit reduces the current liability, and §174 capitalization creates a deferred tax asset. Aleq computes the credit from qualified research expense on the ledger — wages, supplies, contract research at 65% — under the regular or alternative simplified method your team elects, and records §174 spend as a temporary difference with the amortization running from the incurred date.
- R&D credit computed from QRE on the ledger, under the method you elect.
- §174 capitalization recorded as a temporary difference; amortization runs from the incurred date.
- Both posted the credit against current tax, the DTA on the balance sheet, each with its basis.
NOLs carried and tracked, period over period.
Aleq tracks each NOL vintage — the original amount, what's been utilized, and what remains — as carryforwards are applied against current-year income. It applies the post-2017 80% limitation each year, caps annual usage after a Section 382 ownership change from the change date and rate you record, and feeds realization against projected income into the valuation-allowance recommendation held for your sign-off.
- Carryforward tracking original, utilized, and remaining balance by vintage.
- 80% limitation & §382 applied each year; the §382 cap runs from the ownership-change date you record.
- Realization weighed into the recommended valuation allowance; you sign the conclusion.
What controllers and auditors ask.
See your provision computed.
Connect the ledger. Watch Aleq compute current and deferred tax expense from your temporary differences and NOLs, current with the books every period — set the valuation allowance target and it carries the balance forward from there.