The option that would tell us the the income tax liabilities from this situation is that : The corporation will pay taxes on the $50,000 in profits, and Yan and Joel will have to pay taxes on the $17,500 they each received. Option D
<h3>What is meant by income tax liabilities?</h3>
A tax liability is the sum of money that a person, company, or other entity owes to a federal, state, or municipal taxing body. In general, you owe taxes when you earn money or make gains off of the sale of an investment or other item.
In journal entries, businesses deduct income tax expense and credit income tax payable. The completed journal entries include an equal debit and credit to income tax expense and income tax payment, respectively, if businesses utilize the same cash method of accounting for both financial and tax reporting.
Your tax obligation is determined by your taxable income after deductions and tax credits, not your gross income. Line 37 shows your federal tax liability for the current year.
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