Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $7,817,812. At this income level, the federal income rate is 53%, the state tax rate is 19%, and the local tax rate is 9%. If each tax rate is applied to the the total taxable income, the resulting tax liability for the corporation would be (53 + 19 + 9)%. Luckily for the corporation, the taxes paid are deducted as described above. What is the tax liability (as a percentage of taxable income) if the customary deductions are taken into consideration? %. Round to the nearest tenth of a percent (one decimal place).
Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $7,817,812. At this income level, the federal income rate is 53%, the state tax rate is 19%, and the local tax rate is 9%. If each tax rate is applied to the the total taxable income, the resulting tax liability for the corporation would be (53 + 19 + 9)%. Luckily for the corporation, the taxes paid are deducted as described above. What is the tax liability (as a percentage of taxable income) if the customary deductions are taken into consideration? %. Round to the nearest tenth of a percent (one decimal place).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Use the Corporate Income Tax information above to answer
this question.
A corporation has a taxable income of $7,817,812. At this
income level, the federal income rate is 53%, the state tax rate is
19%, and the local tax rate is 9%. If each tax rate is applied to
the the total taxable income, the resulting tax liability for the
corporation would be (53 +19 +9) %. Luckily for the
corporation, the taxes paid are deducted as described above.
What is the tax liability (as a percentage of taxable income) if the
customary deductions are taken into consideration?
%. Round to the nearest tenth of a percent (one
decimal place).
Transcribed Image Text:Corporate Income Tax
A corporation's taxable income is taxed at the federal, state, and
local levels. It is customary for an agency to deduct the taxes
paid to the other agencies before computing the company's tax
liability. For example, the federal taxes are based on the income
that remains after the state and local taxes are deducted.
Similarly, the state taxes are based on the income that remains
after federal and local taxes are deducted; the local taxes are
based on the income that remains after state and federal taxes
are deducted.
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