Question

You have a job with a gross pay of $63,000. Using the website 2018-2019 Federal Tax Brackets, answer the following questions:
a) What is your tax bracket?
  % 22
b) How much of your income is taxed at the following rates:
10% $ 9700
12% $ 39475
22% $ 40000  

Both 12% and 22% is wrong what am I doing wrong when coming up with the answer. please show work

Answer 1

Solution:

Here , we are assuming the Federal Tax Brackets for Single (2018 federal income tax brackets)

(a) Since Gross Pay is $63000

therefore it comes in 22% that is Brackets  $39,476 to $84,200

therefore tax ( liability )= $4,453.50 plus 22% of the amount over $38,700

= 4453.50 + 22% of (63000 -38700)

= 4453.50 + 0.22* ( 24300)

= $ 9799.5

(b) 12 % $ 39475

tax ( liability ) = $952.50 plus 12% of the amount over $9,525

= 952.50 + 12% of ( 39475-9525)

= $ 4546.5

22% $ 40000

tax ( liability ) =  

$4,453.50 plus 22% of the amount over $38,700

= 4453.50 + 22% of ( 40000-38700)   

= $ 4739.5