Question

Required information Problem 5-50 (LO 5-3) The following information applies to the questions displayed below. Part 1 of 2 Last year, TBA Corporation, a calendar-year taxpayer, reported a tax liability of $100,000. TBA confidently anticipates a current-year tax liability of $240,000. points What minimum estimated tax payments should TBA make for the first, second, third, and fourth quarters, respectively (ignore the annualized income method), assuming the following: (Leave no answer blank. Enter zero if applicable. Input all your answers as positive numbers.) Print Problem 5-50 Parta a. TBA is not considered to be a large corporation for estimated tax purposes. Installment Estimated Tax Liability Percentage of Tax Required To Be Paid Required Cumulative Payment Prior Cumulative Payments Required Estimated Tax Payment First quarter Second quarter Third quarter Fourth quarter

Answer 1

Answer : $25,000 each quarter

Logic : TBA's required annual payment is $100,000 which is the lesser of its $100,000 prior year tax liability and its current year $240,000 tax liability (assuming it proves to be no more than this). TBA must pay in 25%, 50%, 75%, and 100% of its first, second, third, and fourth quarter estimated tax payments respectively. In this case, its required payment for each quarter is $25,000 which is one-quarter of the required annual payment.