Question

John and Loretta Smith are in the 28% tax bracket. Their joint taxable income is $134,899. If the first $16,050 is taxed at 10%, with the remainder at 28%, how much tax will they owe?

A: $38,724.75
B: $30,271.75
C: $29,371.72
D: $34,882.72

Answer 1

0.10×16,050+0.28×(134,899−16,050) =34,882.72

Answer 2

$34882.72

Explanation:

Their joint taxable income is $134,899.

We are given that the first $16,050 is taxed at 10%

So,
`10\% * 16050`

`(10)/(100)* 16050`

`1605`

Thus the tax on amount 16050 is 1605

Now remaining income = 134899-16050=118849

So, now we are given that remaining is taxed with 28%

So,
`28\% * 118849`

`(28)/(100)* 118849`

`33277.72`

So, the total tax = 33277.72+1605=34882.72

Hence they owe $34882.72 as tax.

Hence Option D is correct.