Question

Which of the following is not an acceptable method of determining the required annual payment of federal income tax for corporations?

A. 100 percent of the prior year's tax liability (with a few exceptions).
B. 100 percent of the current year's tax liability.
C. 100 percent of the estimated current year tax liability using the annualized income method.
D. All of the choices are acceptable methods of determining the required annual payment of federal income tax for corporations.

Answer 1

All provided options are acceptable methods for corporations to determine their federal income tax payments, including prior year's tax liability, current year's tax liability, and the estimated annualized income method.

Step-by-step explanation:

The question asks about methods to determine the required annual payment of federal income tax for corporations. It presents four options and asks which one is not acceptable. Corporations may use the prior year’s tax liability, the current year’s tax liability, or the estimated current year tax liability calculated using the annualized income method to determine their tax payments. All three of these are acceptable ways for corporations to compute their tax obligations and make estimated tax payments to the IRS throu ghout the year. The correct answer to the question is that all of the choices are, indeed, acceptable methods of determining the required annual payment of federal income tax for corporations.