Question

Chris earns $21,423 per year as a forestry technician. His exemptions include himself, his wife, and their son. The state tax rate in his state is 4.5% of taxable income. How much state tax will Chris owe?

a) $964.04
b) $761.54
c) $214.23
d) $694.04

Answer 1

To calculate Chris' state tax, subtract his exemptions from his total income to determine his taxable income. Then, multiply the taxable income by the state tax rate. Chris will owe $401.54 in state tax.

Step-by-step explanation:

To calculate the amount of state tax Chris will owe, we first need to determine his taxable income. His total income is $21,423, and he has exemptions for himself, his wife, and their son. To calculate the taxable income, we subtract the exemptions from his total income:

Total Income - Exemptions = Taxable Income

$21,423 - ($4,500 + $4,500 + $4,500) = $8,923

Next, we calculate the state tax by multiplying the taxable income by the state tax rate of 4.5%:

Taxable Income x State Tax Rate = State Tax

$8,923 x 0.045 = $401.535

Rounding to the nearest cent, Chris will owe $401.54 in state tax.