Question

Wynn Farms began its business in 2020. Below is a schedule of income (both financial and taxable) for 2020 and 2021, along with taxes paid at the 2020 and 2021 rate of 25%. In 2022, Wynn Farms is faced with an increase in the tax rate to 30%.

Please provide guidance on calculating the taxes payable for Wynn Farms in 2022, considering the change in the tax rate. Use the provided income figures for 2022, and specify any calculations required to determine the tax liability

Answer 1

To calculate the taxes payable for Wynn Farms in 2022, multiply the income for that year by the new tax rate of 30%. An example calculation for an income of $500,000 yields a tax liability of $150,000.

Step-by-step explanation:

To calculate the taxes payable for Wynn Farms in 2022, you need to know the 2022 income figure for Wynn Farms. Once you have the income figure for 2022, you can calculate the tax liability by applying the new tax rate of 30%. The calculation is straightforward: simply multiply the 2022 income by 0.30 (which represents 30%) to find the amount of tax owed for that year.

For example, if Wynn Farms' income in 2022 was $500,000, the tax calculation would be as follows:

• Tax Liability = Income x Tax Rate
• Tax Liability = $500,000 x 0.30
• Tax Liability = $150,000

Keep in mind that the tax rates provided by www.taxpolicycenter.org refer to federal income tax rates for corporations in the United States and serve as a reference for understanding different tax structures that exist. The specific scenario of Wynn Farms would still use the 30% rate mentioned at the beginning of the question.