Taxable Income $0-$9,075 $9,076-$36,900 $36,901-$89,350 $89,351-$186,350 $186,35

Question

Taxable Income $0-$9,075 $9,076-$36,900 $36,901-$89,350 $89,351-$186,350 $186,351-$405,100 $405,101- $406,750 Over $406,750 Tax rate 10% 15% 25% 28% 33% 35% 39.6% 10% 15% 25% 28% 33% 35% 39.6% $0 $9,075 $36,900 $89,350 $186,350 $405,101 $406.750 Taxable income The Gonzalez household's annual income is $400000. Based on the US. federal tax rates shown in the table, what is the total income tax that the Gonzalez household has to pay on its household income? (Assume zero tax deductions.) Choose one: A. $115858.25 B. $259003.75 e C. $132000.00 D. $88800.00 ? 1415 > 12 OF 15 QUESTIONS COMPLETED + VIEW SOLUTION SUBMIT ANSWER

Explanation / Answer

Annual income = $400,000

There is zero tax deduction.

So,

Taxable income = $400,000

Calculate the total income tax -

Total income tax = (9075 * 0.10) + (27825 * 0.15) + (52450 * 0.25) + (97000 * 0.28) + (213650 * 0.33)

Total income tax = $907.50 + $4,173.75 + $13,112.50 + $27,160 + $70,504.50

Total income tax = $115,858.75

The total income tax to be paid is $115,858.75

Hence, the correct answer is the option (A).

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