Question

Goran made $30,000 in taxable income last year. Suppose the income tax rate is 10% for the first $9000 plus 14% for the amount over $9000. How much must Goran pay in income tax for last year?

A) $2,700
B) $3,600
C) $4,500
D) $5,400

Answer 1

Goran owes $3,840 in income tax, calculated by adding the tax on the first $9,000 at 10% and the tax on the remaining amount over $9,000 at 14%.

Step-by-step explanation:

To calculate the taxable income for Goran, we can use the given tax rates. Goran made $30,000 in taxable income last year. The income tax rate is 10% for the first $9,000, and 14% for the amount over $9,000. First, we calculate the tax on the initial $9,000 at 10% which is $9,000 * 0.10 = $900. Then, we calculate the amount over $9,000, which is $30,000 - $9,000 = $21,000. The tax on this remaining amount is at 14%, so it will be $21,000 * 0.14 = $2,940. Finally, we add both tax amounts to determine the total tax: $900 + $2,940 = $3,840.

Goran must pay $3,840 in income tax for last year.