Torquay Inc.'s 2012 taxable income was $9,782,200, and its tax liability was $3,325,948. Torquay's director of tax estimates that the corporation's 2013 taxable income will be $13,350,000. Use the corporate tax rate schedule to compute Torquay's 2013 estimated tax payment due on April 15, 2013.

Question

Quizplus · Accepted Answer

First, we need to calculate the tax liability for the estimated taxable income of $13,350,000:
For the first $50,000: 15% = $7,500
For the next $25,000: 25% = $6,250
For the next $25,000: 34% = $8,500
For the next $235,000: 39% = $91,650
For the next $9,015,000: 34% = $3,063,100
For the next $3,000,000: 35% = $1,050,000

Total Tax Liability = $4,217,000

Next, we need to subtract the estimated tax payments already made:
From the question, we don't have any information on any payments made in 2013. So, we assume that no payments have been made.

Therefore, the estimated tax payment due on April 15, 2013, will be $4,217,000 - $3,325,948 (previous year's tax liability) = $891,052 which is closest to option D) $1,143,125.