Question

Stephanie earned $75,310 last year. Use the Schedule below to determine her taxes.

If your taxable income is:
The tax is:
Of the amount
But not
over---

a) $0
b) $16,050
c) $65,100
d) $75,310

Answer 1

To calculate Stephanie's taxes, we need to determine which tax bracket her income falls into and apply the corresponding tax rates. Her taxable income is $16,050, $49,050, and $10,210 within each bracket respectively. Her total taxes for the year amount to $11,515.

Step-by-step explanation:

The marginal tax rate is the tax rate applied to an additional dollar of income. In this case, Stephanie's income of $75,310 falls within the highest tax bracket. Using the schedule provided, we can determine her taxes step by step:

1. For the first $0 to $16,050, the tax rate is 10%. The taxable income within this bracket is $16,050.
2. For the next $16,050 to $65,100, the tax rate is 15%. Since Stephanie's income falls within this bracket, the taxable income within this bracket is $65,100 - $16,050 = $49,050.
3. Finally, for the amount over $65,100, the tax rate is 25%. Since Stephanie's income falls within this bracket, the taxable income within this bracket is $75,310 - $65,100 = $10,210.

To calculate her taxes:

• Taxes for the first bracket: $16,050 * 10% = $1,605
• Taxes for the second bracket: $49,050 * 15% = $7,357.50
• Taxes for the third bracket: $10,210 * 25% = $2,552.50

Therefore, Stephanie's total taxes for the year would be $1,605 + $7,357.50 + $2,552.50 = $11,515.