Question

On Austin made $40,000 in taxable income last year. Suppose the Income tax rate is 15% for the first $8500 plus 18% for o the amount over $850o. How much must Austin pay in income tax for last year?

Answer 1

$\begin{gathered} \text{The tax on the first \ 8500 is : }\frac{15}{100}\text{ }\times\text{ \ 8500} \\ \text{ =0.15 }\times\text{ \ 8500} \\ \text{ = \ 1275} \\ \text{The Tax on the Reamining income after the first deduction is }\colon\text{ }\frac{18}{100}\text{ }\times\text{ (40,000-8500)} \\ \text{ }\frac{18}{100}\text{ }\times\text{ \ 31500} \\ \text{ =\ 5670} \\ \text{Total Amount to be paid for income tax is : \ 1275 + \ 5670 }=\text{ \ 6945} \end{gathered}$