Question

A corporation enjoyed an increase of? $22,500 in taxable income over the amount earned the year?...

A corporation enjoyed an increase of? $22,500 in taxable income over the amount earned the year? before, which was? $68,000. At what rate was the added income? taxed?

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Answer #1

Ans:

The added income is $22,500.

Of the total added income $7000 is taxed @25% and $15500 is taxed @34%

Analysis

Corporate tax rate

For income Tax rate
$0 to $50,000 15%
$50,001 to $75,000 25%
$75,001 to $100,000 34%

1) Calculation of tax when the taxable income is $68000

Income tax rate Tax amount
$0 to $50,000 15% $50,000 * 15% = $7500
$68,000 25% $18000 * 25% = $4500
Total tax $12000

2) Calculation of tax when the taxable income is $90,500

Income Tax rate Tax amount
$0 to $50,000 15% $50,000 * 15% =$7500
$50001 to $75,000 25% $25000 * 25% = $6250
$75001 to $90,500 34% $15500 * 34% = $5270
Total tax $19020
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