Question

Due to temporary tax cuts in 2010, persons in the U.S. who earned $50,000 per year had a lower tax rate. On average, these persons retained 2% more of their income than before the cuts, due to the lower rate. The 2010 law also gave the same persons a separate $850 credit on their federal tax return, which means they were allowed to subtract $850 from the amount of taxes they owed. How much extra money did a typical person earning $50,000 receive due to the tax cuts?

Answer 1

extra money earn by typical person earning = $1850

Explanation:

earned = $50,000 per year

retained = 2%

credit on their federal tax return = $850

amount of taxes = $850

typical person earning = $50,000

to find out

extra money did a typical person earning receive due to the tax cuts

solution

extra money earn by typical person earning is

extra money earn by typical person earning = 2% of $50000 + $850

extra money earn by typical person earning = $1000 + $850

extra money earn by typical person earning = $1850