Question

4. You are looking at three different job options, one in Pennsylvania, one in Texas, and one in New York.

The offers are as follows:

	Salary	State tax rate
Pennsylvania	$82,000	3.07%
Texas	$84,000	0.00%
New York	$88,000	6.85%

What is the take home pay of the three options? Which of these offers will you accept if you are only interested in maximize your after tax income?

Pennsylvania: ________________

Texas: ______________________

New York: ___________________

Job accepted: _______________________

Regardless of which job you take, you will have to pay federal income taxes. Assuming you are offered $85,000 use the following tax brackets to determine the federal income tax you owe.

Tax Bracket	Low end	High end
10%	$0	$9,225
15%	$9,225	$37,450
25%	$37,450	$90,750
28%	$90,750	$189,300

TAX OWED: _________________

Answer 1

Part I Answer

	Salary
Pennsylvania	$82,000	3.07%
Texas	$84,000	0.00%
New York	$88,000	6.85%

State tax rate

Take home pay of three options are

Pennsylvania = $82,000-3.07% of $82,000=$79,482.6

Texas =  $84,000-0.00% of $84,000= $84,000

New York =  $88,000-6.85% of $88,000=$81,972

Job accepted:Texas'

Part II Answer

Federal Income tax

Assuming you are offered $85,000

Falls in tax bracket

Tax Bracket

Low end

High end

25%

($37,450

$90,750)

Take home pay of Texas $85,000

TAX OWED: 25% of $85,000+ 0.00% of $85,000 =25% of $85,000=$21,250