Question

Use the following tax table to answer this question:

​

Taxable Income		Tax Rate
$ 0-	50,000	15%
50,001-	75,000	25
75,001-	100,000	34
100,001-	335,000	39
335,001-	10,000,000	34

​

Bait and Tackle has taxable income of $411,562. How much does it owe in taxes?

​

Group of answer choices

​$143,759.18

​$132,281.08

​$139,931.08

​$128,603.33

​$190,462.00

Answer 1

Bait and Tackle has taxable income of $411,562

To calculate the tax liability (refer the Tax Rates from given tax table)

Income Tax liability of Bait and Tackle = 15% * $50,000 + 25% * ($75,000 – $50,000) + 34% * ($100,000 – $75,000) + 39% ($335,000 - $100,000) + 34% * ($411,562 -$335,000)

=15% * $50,000 + 25% * $25,000 + 34% * $25,000 + 39% * $235,000 + 34% * $76,562

= $7,500 + $6,250 + $8,500 + $91,650 + $26,031.08

= $139,931.08

The amount of $139,931.08 it owe in taxes

Therefore correct answer is option: $139,931.08