Question

In 2019, NB Inc.’s federal taxable income was $264,000. Compute the required installment payments of 2020...

In 2019, NB Inc.’s federal taxable income was $264,000. Compute the required installment payments of 2020 tax in each of the following cases:

NB’s 2020 taxable income is $485,000.

NB’s 2020 taxable income is $723,000.

NB’s 2020 taxable income is $1,312,000.

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Answer #1

Tax brackets for 2020 federal taxable income :

income from $0 to $9,875- 10% of taxable income

income from $9,876 to $40,125- $987.5 + 12% of the amount over $9,875

income from $40,126 to $85,525- $4,617.50 plus 22% of the amount over $40,125

income from $85,526 to $163,300- $14,605.50 plus 24% of the amount over $85,525

income from $163,301 to $207,350- $33,271.50 plus 32% of the amount over $163,300

income from $207,351 to $518,400- $47,367.50 plus 35% of the amount over $207,350

income from $518,401 or more- $156,235 plus 37% of the amount over $518,400

1. when taxable income of NB Inc's equal to $485000

Tax = $47,367.5+ 35%($485000-$207350)

Tax = $144545

2. when taxable income of NB Inc's equal to $723000

Tax = $156235 + 37%($723000-$518400)

Tax = $231937

3 when taxable income of NB Inc's equal to $1312000

Tax = $156235 + 37%($1312000-$518400)

Tax = $449867

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