Using the following tax bracket cutoffs (the cutoffs represent the top of that b

Question

Using the following tax bracket cutoffs (the cutoffs represent the top of that bracket) calculate the income tax liability for someone with $260,000 of taxable income. (taxable income means that all deductions and exemptions are already accounted for) Hint: do not use a tax table, calculate using the rates and do not use a comma or $ sign

Example: if the answer is $20,000 enter 20000

10% - $40,000

15% - $100,000

25% - $150,000

28% - $230,000

33% - $400,000

35% - $460,000

40% - all income over $460,000

Explanation / Answer

When income is $260000,

Tax liability ($) = 40000 x 0.1 + (100000 - 40000) x 0.15 + (150000 - 100000) x 0.25 + (230000 - 150000) x 0.28 + (260000 - 230000) x 0.33

= 4000 + 60000 x 0.15 + 50000 x 0.25 + 80000 x 0.28 + 30000 x 0.33

= 4000 + 9000 + 12500 + 22400 + 10000

= 57900

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.