Explanation of Tax Estimates Formula for Tax Estimates Based on Mid
Explanation of Tax Estimates 1. "Tax": Estimated for the full year of 2016. The tax figure is based on the corporate tax formula. See below for details of calculating taxable income and estimated taxes. 2. "Tax/Assets": The assets total is from June 30, 2016. 3. "Tax/Gross Income": Gross income is the sum of accounts 110, 119, 120, 124, 131 and 659 on the call report, reported for Mid-Year 2016. 4. "Tax/Operating Expenses": Operating expense is account 671 on the call report. Formula for Tax Estimates Based on Mid-Year 2016 Call Report To estimate each credit union's taxes for the first half of 2016, we (1) computed taxable income for the year, (2) applied the tax formula to calculate an annual tax figure, (3) multiply this figure by .84 (allowing for tax management practices) to arrive at a more realistic amount. We computed taxable income from data in the NCUA/NASCUS mid-year call report. The numbers in parentheses below refer to "Account Codes" on the call report. 1. CALCULATION OF TAXABLE INCOME Taxable Income = Net Income After Cost of Funds (661a) - Net Chargeoffs (550 minus 551) + Provision for Loan Loss (300) II. CALCULATION OF TAX Annual Taxable Income (TI) Annual Tax Negative Negative 0 - $50,000 0.15 (TI) $50,000 - $75,000 $7,500 + 0.25 (TI-$50,000) $75,000 - $100,000 $13,750 + 0.34 (TI - $75,000) $100,000 - $335,000 $22,250 + 0.39 (TI - $100,000) $335,000 - $10 Mil $113,900 + 0.34 (TI - $335,000) $10 Mil - $15 Mil $3,400,000 + .35 (TI - $10 Mil) $15 Mil - $18.3 Mil $5,150,000 + .38 (TI - $15 Mil) Over $18.3 Mil $6,416,667 + .35 (TI - $18.3 Mil) III.
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