Corporation Growth has 81,000 in taxable income, and Corporation Income has $8,1

Question

Corporation Growth has 81,000 in taxable income, and Corporation Income has $8,100,000 in taxable income. A. What is the tax bill for each team? Corporation Growth=? Corporation Income=?

Suppose both firms have identified a new project that will increase taxable income by $8,500, how much in additional taxes will each firm pay?

Corporation Growth=? Corporation Income=?

http://lectures.mhhe.com/connect/0073382469/Images/table2.3.jpg

Suppose both firms have identified a new project that will increase taxable income by $8,500, how much in additional taxes will each firm pay?

Corporation Growth=? Corporation Income=?

http://lectures.mhhe.com/connect/0073382469/Images/table2.3.jpg

Explanation / Answer

Answers a) Answers b) From Upto Tax rate tax on part of income which lies in this bracket Mimimum Cumulative tax tax on $81,000 tax on $8,100,000 Additional tax on 8500 income over 81,000 (= 8500*tax rate of the bracket) Additional tax on 8500 income over 8,100,000 (= 8500*tax rate of the bracket) $                  -   $          50,000 15% 7500 $        50,001 $          75,000 25% 6249.75 7500 $        75,001 $        100,000 34% 8499.66 13749.75 $       15,789.75 $                     2,890.00 $      100,001 $        335,000 39% 91649.61 22249.41 $      335,001 $ 10,000,000 34% 3286099.66 113899.02 $       2,753,999.02 $                     2,890.00

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