Question

Table 12-2
Consider the tax rates shown in the table below.

Tax Rate	Income Range
8%	0 - 15,000
16%	15,000 - 35,000
24%	35,000 - 75,000
34%	75,000 - 145,000
36%	145,000 - 330,000
38%	over 330,000

Refer to Table 12-2. If Livi has taxable income of $78,000, her tax liability is

Group of answer choices

$7,800.

$9,900.

$10,200.

$15,020.

Answer 1

Solution:-

Taxable income = $78,000

Tax Liability = (15,000 * 8%) + (35,000 – 15,000 * 16%) + (75,000 – 35,000 * 24%) + (78,000 – 75,000 * 34%)

                    = (15,000 * 8%) + (20,000 * 16%) + (40,000 * 24%) + (3000 * 34%)

                    = 1200 + 3200 + 9600 + 1020

                    = 15,020

Livi tax liability is $15020.