Respuesta :
Taxable Income x Tax Rate = 120,000 x .2 = $24,000 income tax payable
Income Tax :
An income tax is a tax levied on individuals or entities based on their earnings or profits. In most cases, income tax is calculated as the product of a tax rate multiplied by the taxable income. Taxation rates may differ depending on the taxpayer's characteristics and the type of income. As taxable income rises, so may the tax rate. Corporate tax is a type of tax levied on businesses that is typically levied at a flat rate. Individual income is frequently taxed at progressive rates, with the tax rate increasing with each additional unit of income. The majority of jurisdictions exempt local charitable organisations from taxation. Investment income may be taxed at a different rate than other types of income. Tax credits of various kinds may be permitted. Some jurisdictions levy the greater of an income tax or a tax on a different basis or measure of income.
Taxable income of residents of the jurisdiction is generally total income less income producing expenses and other deductions. In general, income includes only the net gain from the sale of property, including goods held for sale. Distributions of profits from the corporation are typically included in the income of a corporation's shareholders. Deductions typically include all income-producing or business expenses, as well as an allowance for the recovery of business asset costs. Many jurisdictions allow notional deductions for individuals and may allow some personal expenses to be deducted. Most jurisdictions either do not tax income earned outside of their borders or provide a credit for taxes paid to other jurisdictions on such income. With few exceptions, nonresidents are taxed only on certain types of income earned within the jurisdictions.
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The amount to be reported as income tax payable = $24,000
What is income tax ?
The word income tax refers to a category of tax that governments apply on income produced by organizations and people within their territorial authority. According to the law, taxpayers must submit an income tax return each year to find out how much money they owe in taxes.
The government gets its money from income taxes. They are employed to finance government obligations, pay for public services, and supply citizens with goods. Numerous states and municipal governments also demand payment of income tax, in addition to the federal government.
To aid in the funding of the Civil War, the United States enacted the first income tax in 1862. When the Revenue Act of 1913 was passed, the tax was reintroduced after the war.
To solve the question :
Taxable Income x Tax Rate = 120,000 x 0.2 = $24,000
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