Question

Your firm currently has taxable income of $80,000. How much additional tax will you owe if...

Your firm currently has taxable income of $80,000. How much additional tax will you owe if you increase your taxable income by $21,200?

$8,268

$7,268

$6,888

$6,878

$7,208

$35,745

(Not sure if the tax rates have anything to do with this problem or my previous problem so I'm inserting it just incase. If it is needed then it goes with this problem)

The tax rates are as shown below:

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

Please show how you got the answer not just the answer. Thank you

Homework Answers

Answer #1


Correct option is > $7,268

Taxable Income

Tax Rate

Previous Income

Revised Income

Tax Previous

Tax Revised

Slabs

R

PI

RI

TP =PI x R

TR = RI x R

$0 – 50,000

15%

50000

50000

7500

7500

50,001 – 75,000

25%

25000

25000

6250

6250

75,001 – 100,000

34%

5000

25000

1700

8500

100,001 – 335,000

39%

0

1200

0

468

Total

80,000

101,200

15,450

22,718

Additional tax = Total of Tax Revised - Total of Tax Previous

Additional tax = 22718 - 15450

Additional tax = $7,268

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