Question

Guy is self employed. In one year, Guy generates a gross income of $44,500. When calculating his taxes, Guy is allowed to deduct $2,500 in expenses from his gross income (the result is his 'operating income'). Guy must then pay 10% tax on all operating income up to $20,000 and then 20% on any operating income over $20,000. Calculate the amount of tax that Guy must pay. Give your answer in dollars to the nearest dollar. Do not include commas or the dollar symbol in your answer.

Answer 1

Answer:

20000÷20= the amount you need for the income price is 16000

Answer 2

Answer:

Step-by-step explanation:

Operating Income=$44,500−$2,500=$42,000.

So Guy will be taxed 10% on $20,000 and 20% on $(42,000−20,000)=$22,000, hence

Total Tax=10%×$20,000+20%×$(42,000−20,000)=$6,400.