Question

You earn $50,000 dollars per year and the federal tax rate is 10%. Your gross income is

a. $5,000
b. $10,000
c. $45,000
d. $50,000

Answer 1

A because if you multiply 50,000 by .10 (10%) you'll get 5,000

Answer 2

d. $50,000

Explanation:

Since, gross pay is the payment before charging any tax or deduction.

Given,

The original earning = $ 50,000,

Percentage of federal tax rate = 10%,

So, the gross income would be $ 50,000

Note : the gross income after deduction of any taxes is called total taxable income.

Hence, OPTION d is correct.