Question

In 2016, NB Inc.'s federal taxable income was $242,000. Compute the required installment payments of 2017 tax in each of the following cases: Use Corporate tax rate schedule.

a. NB’s 2017 taxable income is $593,000.

b. NB’s 2017 taxable income is $950,000.

c. NB’s 2017 taxable income is $1,400,000.

CORPORATE TAX RATES

If taxable income is: The tax is:

Not over $50,000 15% of taxable income

Over $50,000 but not over $75,000 $7,500 + 25% of the excess over $50,000

Over $75,000 but not over $100,000 $13,750 + 34% of the excess over $75,000

Over $100,000 but not over $335,000 $22,250 + 39% of the excess over $100,000

Over $335,000 but not over $10,000,000 $113,900 + 34% of the excess over $335,000

Over $10,000,000 but not over $15,000,000 $3,400,000 + 35% of the excess over $10,000,000

Over $15,000,000 but not over $18,333,333 $5,150,000 + 38% of the excess over $15,000,000

Over $18,333,333 $6,416,667 + 35% of the excess over $18,333,333

Answer 1

• All working forms part of the answer
• Tax has been calculated to each successive part according to slabs individually for understanding
• Answers

Answer (a) Taxable Income $593,000
Cumulative Taxable Income	$           50,000.00	$           75,000.00	$      1,00,000.00	$     3,35,000.00	$       5,93,000.00
Taxable Income (A)	$           50,000.00	$           25,000.00	$         25,000.00	$     2,35,000.00	$       2,58,000.00
Tax Rate (B)	15%	25%	34%	39%	34%
Tax on Income (A x B)	$              7,500.00	$             6,250.00	$            8,500.00	$        91,650.00	$          87,720.00
Total Income taxes	$201,620
Answer (b) Taxable Income $ 950,000
Cumulative Taxable Income	$           50,000.00	$           75,000.00	$      1,00,000.00	$     3,35,000.00	$       9,50,000.00
Taxable Income	$           50,000.00	$           25,000.00	$         25,000.00	$     2,35,000.00	$       6,15,000.00
Tax Rate	15%	25%	34%	39%	34%
Tax on Income	$              7,500.00	$             6,250.00	$            8,500.00	$        91,650.00	$       2,09,100.00
Total Income taxes	$ 323,000
Answer (c) Taxable Income $ 1,400,000
Cumulative Taxable Income	$           50,000.00	$           75,000.00	$      1,00,000.00	$     3,35,000.00	$    14,00,000.00
Taxable Income	$           50,000.00	$           25,000.00	$         25,000.00	$     2,35,000.00	$    10,65,000.00
Tax Rate	15%	25%	34%	39%	34%
Tax on Income	$              7,500.00	$             6,250.00	$            8,500.00	$        91,650.00	$       3,62,100.00
Total Income taxes	$ 476,000