Tax Table Rate $0 $9,525 10% $9,525 $38,700 12% $38,700 $82,500 22% $82,500 $157,500 24% $157,500...

Tax Table		Rate
$0	$9,525	10%
$9,525	$38,700	12%
$38,700	$82,500	22%
$82,500	$157,500	24%
$157,500	$200,000	32%

Given the tax table provided, compute the tax on $27,005 of taxable income.

Answer to the nearest dollar, use commas when appropriate, but do not include the $ in your answer.

Expert Solution

Tax calculation is as follows:

Lower limit	Upper limit	Tax rate	Income taxable in this bracket	Tax	Remaining income
-	9,525.00	0.10	9,525.00	952.50	17,480.00
9,525.00	38,700.00	0.12	17,480.00	2,097.60	-
38,700.00	82,500.00	0.22	-	-	-
82,500.00	1,57,500.00	0.24	-	-	-
1,57,500.00	2,00,000.00	0.32	-	-	-
		Total	27,005.00	3,050.10

Income taxable in this bracket = upper limit - lower limit of the bracket
Tax = Income taxable in this bracket x Tax rate of the bracket
Remaining income = EBT- Total income taxed in all previous brackets
So total tax payable = 3,050.10 os 3,050 rounded to the nearest dollar

jeff jeffy answered 2 years ago

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