Given the tax rate schedule below, what’s the tax liability for a corporation wi

Question

Given the tax rate schedule below, what’s the tax liability for a corporation with taxable income of $8 million?

Corporate Tax Rates                                    Taxable Income:

15%                                       $                 0 - $       50,000

25%                                       $       50,000 - $       75,000

34%                                       $        75,000 - $      100,000

39%                                       $      100,000 - $     335,000

34%                                       $      335,000 - $ 10,000,000

35%                                       $ 10,000,000 - $ 15,000,000

38%                                       $ 15,000,000 - $ 18,333,333

35%                                                       over $ 18,333,333

Explanation / Answer

Answer:

Tax liability = 0.34 x $8 million- $100,000

                    = $2720000 -100000 = $2,620,000

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