Question

In 2018, NB Inc.'s federal taxable income was $280,000. Compute the required installment payments of 2019 tax in each of the following cases: (Round your Intermedlate calculations and final answers to the nearest whole dollar amount.) a. NB's 2019 taxable income is $429,000. b. NB's 2019 taxable income is $902,000. c. NB's 2019 taxable income is $1,162,000. a. Total installment payments b. Total installment payments C. Total installment payments

Answer 1

Prior year (2018) taxable income = $280,000

Thus 2018 Tax liability = 21% of $280,000 = $58,800

a) NB's 2019 taxable income is $429,000

Thus 2019 Tax liability = 21% of $429,000 = $90,090

Thus is an other than NB large corporations

Thus installment payments for 2019 would be = lesser of 100% of the current year tax liability, or 100% of the prior year tax liability = lesser of $58,800 or $90,090 = $58,800

b) NB's 2019 taxable income is $902,000

Thus 2019 Tax liability = 21% of $902,000 = $189,420

Thus NB is an other than large corporations

Thus installment payments for 2019 would be = lesser of 100% of the current year tax liability, or 100% of the prior year tax liability = lesser of $58,800 or $189,420 = $58,800

c) NB's 2019 taxable income is $1,162,000

Thus 2019 Tax liability = 21% of $1,162,000 = $244,020

Thus NB is a large corporations

Thus installment payments for 2019 would be = 100% of the current year tax liability

= $244,020