Find Q3 and Q4 estimated tax prepayments.
Kold Services Corporation estimates that its current-year taxable income will be $500,000. Assuming a 21% Federal corporate income tax rate, it will incur a $105,000 liability. For each of the following independent cases, compute Kold's 2024 minimum quarterly estimated tax payments that will avoid an underpayment penalty.
| c. | Two years ago, taxable income was $2,000,000, and tax liability was $680,000. Last year, taxable income was $400,000, and tax liability was $84,000. | Q1 $21,000 | Q2 $31,500 |
Q3 $____ |
Q4 $____ |
Find Q3 and Q4 estimated tax prepayments.
Given,
Kold Services Corporation estimates $500,000 as its current year taxable incone
To compute the estimated tax prepayments, we need to determine the annual estimated tax liability based on previous year's tax liability, and divide it with 4 to get quarterly amount.
a)Tax liability for the last 2 years = $680,000+$84,000
=$764,000
b)The next step is to divide (a) with 4 to get the quarterly amount,
=$764,000/4
=$47,750
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