How is total federal tax provision calculated and effective tax rate calculated?
Homework Answers
The US tax for corporate is now Flat 21% after Tax Cuts and Jobs Act of 2017.
Applying 21% tax rate Federal income tax liability and deferred tax Asset have been calculated.
Federal Income tax liability = Taxable Income * Federal tax rate
265 (264,6) =1260*21%
Deferred Tax Asset = Temporary difference * federal tax rate
161 (160,65) = 765*21%
Effective Tax Rate = 22.19% (425/1490)
Federal Tax Provision = 265 (This will be equivalent to federal income tax unless there is any other adjustment)
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How is total federal tax provision calculated and effective tax
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