francescanajar5
08.07.2020 •
Business
Cindy's current year adjusted gross income (AGI) is $300,000 and her current year total tax liability is $60,000. Her immediate prior year AGI is $200,000 with a total tax liability of $40,000. To avoid an underpayment interest penalty, what is Cindy's minimum required total tax payment amount for the current year
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Ответ:
The answer is $44,000
Explanation:
Solution
Given that
Now
Present/current year AGI = $300000
Present /current year tax liability = $60000
Prior year AGI = $200000
Prior year tax liability = $40000
Thus
As per Tax rule or applying the Tax rule
If Adjusted gross income(AGI) of prior year is below $250000 then the minimum required tax payment in the current year in order to avoid interest penalty is lower of
(1) 90% of present /current year tax (liability) or
(2) 110% of prior year tax liability
So
Because the prior year AGI is $200000 which is lower than $250000, in order to avoid interest penalty, the minimum required payment amount of tax liability in current/present year is lower of
(1) 90% of current year tax liability of $60000
Then
$60000 *90% = $54000
Or
(2)110% of prior year tax liability of $40000
$40000 ×110% = $44000
Hence, minimum required total tax payment amount for the current year is $44,000
Ответ:
The company should accept the idea reason been that the profit will increase by $24,000
Explanation:
Calculation to determine What should the company do
First step
Increased CM = [10,750 x (27+(40-45))]- (10,000 x 27)
Increased CM = [10,750 x(27+5)]- (10,000 x 27)
Increased CM = (10,750 x 32) - (10,000 x 27)
Increased CM = $344,000-$270,000
Increased CM = $74,000
Now let calculate the profit
Profit =$74,000-$50,000
Profit=$24,000 Increase
Therefore based on the above calculation The company should accept the idea reason been that the profit will increase by the amount of $24,000