Question

Joan Smith earns $42,500.00; is married with one child. The tax rate is 2½%. Calculate the tax. Federal exemption is $3,000.00

Answer 1

$987.50

Explanation:

To calculate Joan Smith's tax, we need to follow these steps:

Step 1: Determine the taxable income

Taxable Income = Joan Smith's earnings - Federal exemption

Taxable Income = $42,500.00 - $3,000.00 = $39,500.00

Step 2: Calculate the tax amount

Tax amount = Taxable Income * Tax rate

Tax amount = $39,500.00 * 2.5% = $987.50

Therefore, Joan Smith's tax amount is $987.50.