Question

Assume that you face the marginal tax rate schedule below and your income is $127,646. What...

Assume that you face the marginal tax rate schedule below and your income is $127,646. What is your total tax?

Income Marginal Tax rate

Up to $15,600       10%
$15,600-63,000     15%
$63,000-128,500   25%
Over   $128,500     33%

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Homework Answers

Answer #1

The amount is computed as shown below:

On first $ 15,600, tax will be as follows:

= $ 15,600 x 10%

= $ 1,560

Amount above $ 15,600 and till $ 63,000 is charged with 15% as shown:

= ($ 63,000 - $ 15,600) x 15%

= $ 47,400 x 15%

= $ 7,110

Amount above $63,000 and till $128,500 is charged with 25% as shown:

= ($ 127,646 - $ 63,000) x 25%

= $ 16,161.5

So, the total amount will be as follows:

= $ 1,560 + $ 7,110 + $ 16,161.5

= $ 24,831.5

Feel free to ask in case of any query relating to this question      

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