Which of the following is not an acceptable method of determining the required annual payment of federal income tax for corporations?
A)100 percent of the prior year's tax liability (with a few exceptions).
B)100 percent of the current year's tax liability.
C)100 percent of the estimated current-year tax liability using the annualized income method.
D)All of these choices are acceptable methods of determining the required annual payment of federal income tax for corporations.

Question

Quizplus · Accepted Answer

All the options listed (A, B, and C) are indeed acceptable methods for determining the required annual payment of federal income tax for corporations. Option A allows corporations to base their payments on the prior year's tax liability, which is particularly useful for stable or predictably earning companies. Option B allows for payment based on the actual current year's tax liability, suitable for companies that can accurately estimate their earnings. Option C, the annualized income method, lets corporations estimate their tax based on income as it is earned throughout the year, which can be beneficial for businesses with fluctuating income. Therefore, all these methods are recognized and permissible for corporate tax payments.

Which of the Following Is Not an Acceptable Method of Determining