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contemporary engineering economics 2b) An unmarried engine An unmarried engineer

ID: 1121958 • Letter: C

Question

contemporary engineering economics 2b) An unmarried engine An unmarried engineer earns $100,000 for work one $3,oo0 exemption and estimated ear. The engineer claims itemized deduction of $20, 00o. If single people are automatically allowed $2, 400 of deductions. Use the 2 tables to compute the Engineer's Eedera ncome tax liabix under the following mutually exclusive conditions: tax ty to claims the standard i) If the engine the engineer chooses to itemize deductions. edctin Tax Tables (199x) (Approx.) Up to $25,000 of taxable income > $25,000 and less than $50,000 > $50,000 and less than $120,000 Tax rate 32% Tax rate 12 Tax rate-26%

Explanation / Answer

i) Income (without tax deductions) = $100000

Exemption claimed = $3000

Standard deduction = $2400

=> Taxable income = 100000 - 3000 - 2400 = $94600

ii)

Income (without tax deductions) = $100000

Exemption claimed = $3000

Standard deduction = $20000

=> Taxable income = 100000 - 3000 - 20000 = $77000

Tax Slab Tax Rate Income in tax slab Tax 0 - $25000 12% $25000 $3000 $25000 - $50000 26% $25000 $6500 $50000 - $120000 32% $44600 $14272 Total Income Tax $23772