TasteCo,Inc.reported $210,500 of taxable income this year.What is its regular tax liability?

Question

Quizplus · Accepted Answer

To calculate regular tax liability, we need to use the tax rate schedule. For the tax year 2020, the tax rate for a taxable income of $210,500 is 24%. Therefore, the regular tax liability is:

$210,500 x 24% = $50,520
Plus, the base tax amount for a taxable income of $163,300 to $207,350 is $32,569.50.

So, the total regular tax liability for TasteCo, Inc. is:

$50,520 + $32,569.50 = $83,089.50

The closest option to this amount is B: $65,345. Therefore, B is not the correct answer. The correct amount is higher than what is offered in the options, but the closest option to it is B.