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Homework answers / question archive / Sarah is a cash-method, calendar-year taxpayer, and she is considering making the following cash payments related to her business

Sarah is a cash-method, calendar-year taxpayer, and she is considering making the following cash payments related to her business

Taxation

Sarah is a cash-method, calendar-year taxpayer, and she is considering making the following cash payments related to her business. 
Calculate the after-tax cost of payment assuming she is subject to a 37 percent marginal tax rate. (Do not round intermediate calculation.) 

a) $2,000 payment for next year's property taxes on her place of business. 
 

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a) Computation of the after tax cost of payment:-

Property taxes are deductible on payment basis.

After tax cost = Payment * (1 - Tax rate)

= $2,000 * (1 - 37%)

= $1,260