Question

In 2017, NB Inc.'s federal taxable income was $242,000. Compute the required installment payments of 2018 tax in each of the following cases: NB’s 2018 taxable income is $593,000. NB’s 2018 taxable income is $950,000. NB’s 2018 taxable income is $1,400,000.

Answer 1

Answer
Answer No.	TAXABLE INCOME	Total Tax (As per working Note	No. of Installment	Per Installment
(a)	$ 593000	$ 201620	4	50405
(b )	$ 950000	$ 323000	4	80750
(c )	$ 1400000	$ 476000	4	119000
WORKING NOTE:
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