Question

Use the Single Tax Brackets chart to answer the question that follows.


Single Payer Tax Brackets
Taxable Income: Income Tax:
$0–$8,375 10% of the amount
$8,375–$34,000 $837.50 plus 15% of the amount over $8,375
$34,000–$82,400 $4,681.25 plus 25% of the amount over $34,000
$82,400–$171,850 $16,781.25 plus 28% of the amount over $82,400
$171,850–$373,650 $41,827.25 plus 33% of the amount over $171,850
$373,650+ $108,421.25 plus 35% of the amount over $373,650


James has a taxable income of $167,391. What is his tax liability?

Answer 1

@jim_thompson5910 this one?

Answer 2

unfortunately taxes aren't as simple as taking a single percentage and you're done

that would be nice though

Answer 3

fyi, there are forty questions, i only need help on like 5 that i completely dont know

Answer 4

what you do is start with the lowest amount, evaluate the tax on that

then move up the bracket and you add on taxes based on the amount over the tax bracket thresholds

Answer 5

see, this is why im asking my peers, because i dont know any of the questions im asking

Answer 6

the taxable income is 167,391

the first 8,375 is taxed at 10%

so you take 10% of 8,375 to get 837.50

----------------------------------------

now you move onto the next tax bracket and you only apply the tax rate here for the remaining amount over 8,375

so you are taxing the remaining 167,391 - 8,375 = 159,016 at 15% and adding it to the total tax amount

see how this is all working out?

Answer 7

luckily, they seemed to have done much of the work for us because I just noticed it says "$837.50 plus 15% of the amount over $8,375"

so they've already computed the lower tax bracket amounts

Answer 8

No sir, im sorry

Answer 9

hmm well taxes are definitely confusing (much of it is on purpose sadly)

Answer 10

I can tell, my brain is not liking taxes

Answer 11

the important thing to notice is that $167,391 is in the $82,400–$171,850 tax bracket

Answer 12

so you apply the rule

$16,781.25 plus 28% of the amount over $82,400

Answer 13

so no matter what, you're paying $16,781.25

Answer 14

I understand that because its common sense haha

Answer 15

you then add on 28% of what's left over (after subtracting off 82,400)

so

16,781.25 - 82,400 = 84,991

then you apply the 28% rate to this portion to get

0.28*84,991 = 23,797.48

so you add on this amount to the 16 grand amount we already stated above

16,781.25 + 23,797.48 = 40,578.73

Answer 16

You are typing something biiiiiiiiiiiiiiiiiiiiiiiiiiig

Answer 17

or just something with a lot of calculations

Answer 18

true, dang son, you are a mathematician, its crazy

Answer 19

so he owes $40,578.73 in taxes

Answer 20

nah this is just a lot of arithmetic (and crazy hard to remember rules)

Answer 21

Well, thanks again buddy, im about to ask another few questions haha, and i guess, i thought i used to be good at math... jokes

Answer 22

you just need more practice and if you've never seen stuff like this before, then it's going to be crazy

Answer 23

for sure