Question

Alan Grey has a federal taxable income of $31,500. He pays a state income tax rate of 2.5% on his federal taxable income. Find his state income tax.

A. $7.875
B. $78.75
C. $787.50
D. $7,875

Answer 1

To calculate Alan Grey's state income tax of 2.5% on his federal taxable income of $31,500, we multiply the income by the tax rate, resulting in $787.50.

Step-by-step explanation:

The student is asking how to calculate the state income tax based on a given federal taxable income and a state income tax rate. To find Alan Grey's state income tax for a federal taxable income of $31,500, we simply multiply his taxable income by the state income tax rate of 2.5%. The calculation is as follows:

State income tax = Federal taxable income × State income tax rate

State income tax = $31,500 × 0.025

The result is $787.50, which means the correct answer to the question is option C.