Question

2007 Federal Income Tax Table

Single:
Over But not over The tax is
$0 $7,825 10% of the amount over $0
$7,825 $31,850 $788 + 15% of the amount over $7,825
$31,850 $77,100 $4,386 + 25% of the amount over $31,850
$77,100 $160,850 $15,699 + 28% of the amount over $77,100
$160,850 $349,700 $39,149 + 33% of the amount over $160,850
$349,700 And Over $101,469 + 35% of the amount over $349,700
Tim Tradesman estimates his taxable income will be $7,500. He is paid every two weeks or 26 times a year. Because Tim has only one source of income, he uses the Tax Tables to estimate how much will be deducted form his pay for withholding.

1. Finds the tax rate for his income level. =
%

2. Enters the base amount. = $

3. Enters the amount of tax owed. = $

4. Divides by
= $

Answer 1

Tim Tradesman's tax rate for his $7,500 income is 10%.

The base amount is $0, and the total tax owed is $750.

Divided by 26 paychecks, Tim will have approximately $28.85 withheld from each paycheck for federal income taxes.

Step-by-step explanation:

To find the tax rate for Tim Tradesman's income level, we refer to the provided 2007 Federal Income Tax Table.

Since Tim estimates his taxable income to be $7,500, which falls within the first bracket of 'Over $0 but not over $7,825', his tax rate is 10%.

The base amount in this bracket is $0 because there is no fixed amount added to the percentage of income over $0.

To calculate the amount of tax owed, Tim would multiply his taxable income of $7,500 by his tax rate of 10%, resulting in a tax bill of $750 ($7,500 * 0.10).

To estimate the withholding per paycheck, Tim would divide the total tax owed ($750) by the number of times he is paid per year, which is 26.

This results in approximately $28.85 ($750 / 26) per paycheck.