Question

This year, Mesa Inc.’s before-tax income was $11,252,000. It paid $529,000 income tax to Minnesota and $451,000 income tax to Illinois. Compute Mesa’s federal income tax. What is Mesa’s tax rate on its income?

Answer 1

Before-tax income $ 11,252,000

Less: Deduction for state income tax(529000+451000) $ 980,000

Taxable Income $ 10,272,500

Tax rate 21%

Federal income tax $ 2,157,225.00

Mesa’s combined tax rate

= ([$980,000 state tax + $2,157,225 federal tax] ÷ $11252000) 27.88%

Step-by-step explanation: