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4 votes
Devon is a single man whose salary is $90,000 per year. Based on the tax

table below, how much does he need to contribute to his employer's 401(k) in
order to fall into a lower tax bracket?
Single
Married Filing Jointly
Taxable
But not
Bracket
Taxable
income is
over
But not
over
Bracket
8,350
10%
10%
16.700
67.900
8.350
33.960
15%
33.950
$0
16700
67.900
137050
208050
372,960
137050
208 160
82.250
171550
372 950
82 250
171550
372,950
33%
372.950
O
A. $8350
B. $7750
c. $1500
D. $6050
O
O

User Sruthi
by
7.5k points

2 Answers

5 votes

Answer:

Devon is a single man with a taxable income of $90,000 per year. Based on the tax table, he falls into the taxable bracket of $83,50 to $16,700, with a tax rate of 10%. To fall into a lower tax bracket, he would need to reduce his taxable income by the difference between the two brackets, which is $83,500 - $16,700 = $66,800. To reduce his taxable income by this amount, he would need to contribute $66,800/$90,000 = 0.742 or 74.2% of his salary to his employer's 401(k) plan. This means he would need to contribute $90,000 * 0.742 = $66,780 to his 401(k).

User Stefan Friesel
by
7.0k points
6 votes

Answer:

$7750

Step-by-step explanation:

$90,000-$7750=$82,250 (The tax bracket he wants to be in)

User Hermeslm
by
7.0k points