Question

Assume no deductions or adjustments to your taxable income. Your taxable income is $90,000. Taxable Income...

Assume no deductions or adjustments to your taxable income. Your taxable income is $90,000. Taxable Income Rate $0 − $9,875 at 10% (Hint: = $988) 9,875 − 40,125 at 12% (Hint: = $3,630) 40,125 − 85,525 at 22% (Hint: = $9,988) 85,525 −163,300 at 24% What is your tax liability?

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Answer #1

=> For the amount from $0 - $ 9,875 you have to pay 10% tax on it

* 10% of $ 9,875 = $ 988

=> For the amount from $ 9875 - $ 40,125(that is 30,250) you have to pay tax of 12% on it

* 12% of $ 30,250 = $ 3,630

=> For the amount from $ 40,125 - 85,525 ( that is 45,400) you have to pay tax of 22% on it

* 22% of $ 45,400 = $ 9,988

=> For the amount $ 85,525 - 90,000 ( that is 4,475) you have to pay 24% on it

* 24% of $ 4,475 = $ 1,074

=> Total tax liability on your income of $ 90,000 = 988 + 3,630 + 9,988 + 1,074 = $ 15,680

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