Corporate Income Tax: Barrington Enterprises earned 3.5 million in taxable incom

Question

Corporate Income Tax: Barrington Enterprises earned 3.5 million in taxable income (earnings before taxes) during its most recent year of operations. Use the corporate tax rates shown in the pop up window to calculate the firm's tax liability for the year. What are the firm's average and marginal tax rates?

Taxable Income l Marginal Tax Rate
0-50,000 l 15%
50,001-75,000 l 25%
75,001-100,000 l 34%
100,001-335,000 l 39%
335,001-10,000,000 l 34%
10,000,001-15,000,000 l 35%
15,000,001-18,333,333 l 38%
Over 18,333,333 l 35%

The firm's tax liability for the year is___?

Explanation / Answer

Tax Liability = 3500000 * 34% = 1190000

Thanks

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