Question

Bill made $1000 in taxable income last year. suppose the income tax rate is 15% for the first $7500 plus 18% for the amount over $7500. How much must bill pay in income tax for last year?

Answer 1

Bill made $1000 of taxable income.

The tax rate is:

15% for the first $7500 plus 18% for any amount above $7500.

Please check that you typed the correct taxable income, since you typed $1000 (one thousand) and there is no quantity above $7500 in such case.

So if the income is in truth $1000, then all we need to apply is the 15% of the income, because $1000 doesn't go above the limit of $7500.

This is then:

15% of $1000 = 0.15 * 1000 = $150

So the taxes Bill needs to pay is $150 (one hundred fifty dollars)