Question

Nancy is single, with an adjusted gross income of $25,985. She has one exemption of $12,400. What is the amount of tax due?

Option 1: $1353
Option 2: $1358
Option 3: $1426
Option 4: $1432

Answer 1

To calculate Nancy's tax due, subtract her exemption from the adjusted gross income to find taxable income, and then apply the tax table to find the tax due, which is $1,426.

Step-by-step explanation:

The subject in the given student's question is related to figuring out the amount of tax due for an individual with an adjusted gross income and a specific exemption. According to the tax table provided, we can calculate taxable income by subtracting the exemption from the adjusted gross income. In Nancy's case, her taxable income would be $25,985 - $12,400, which equals $13,585. Using the tax rate table, her tax would be $837.50 + 0.15 × ($13,585 - $8,375), which equals $1,426.