Question

Manny’s taxable income for

2015 was $56,027. He calculates his
income tax by subtracting $11,023
from this amount and taking 26% of
the remaining amount. If Manny
already has $10,261.36 in tax credits
for 2015, how much tax does Manny
still owe?

Answer 1

Manny's taxable income after subtracting the basic personal amount of $11,023 is:

$56,027 - $11,023 = $45,004

Manny's income tax is 26% of $45,004, which is:

$45,004 x 0.26 = $11,701.04

However, Manny already has $10,261.36 in tax credits for 2015, so the amount of tax he still owes is:

$11,701.04 - $10,261.36 = $1,439.68

Therefore, Manny still owes $1,439.68 in taxes for 2015.