Question

Wallis Rainwater earns $37,200 annually and claims 2 dependents. What is the amount for state income tax if his state's tax rate is 4% of taxable income and exemptions are $4,000 for a married person and $2,000 for each dependent?

a) $976
b) $1,248
c) $1,152
d) $1,104

Answer 1

Calculating Wallis Rainwater's state income tax involves subtracting exemptions from his annual income to find his taxable income, and then applying the tax rate. His taxable income is $29,200 after exemptions, and multiplying by the 4% tax rate gives a state income tax of $1,168, which doesn't match any of the given options.

Step-by-step explanation:

To determine the amount of state income tax that Wallis Rainwater needs to pay, we have to calculate his taxable income first by considering exemptions. He claims a married person exemption of $4,000 and exemptions for 2 dependents, which is $2,000 each.

The exemptions total is $4,000 (for himself) + $2,000 (for each dependent) × 2 dependents = $8,000. Therefore, Wallis's taxable income is his annual income of $37,200 minus the exemptions of $8,000, resulting in a taxable income of $29,200.

Next, to calculate the state income tax, multiply the taxable income by the state's tax rate of 4%: $29,200 × 0.04 = $1,168.

However, this calculation does not match any of the options given (a) $976, (b)$1,248, (c)$1,152, (d)$1,104. There might be a mistake in the provided options or in the details of the question.