Question

7. Jillian has two job offers. Job A pays an annual salary of $41,900, while job B pays $44,700. Jillian files her federal income tax return with a standard deduction of $5700, only herself as an exemption for $3650, and no additional adjustments to income. She wants to know the difference in pay between the two jobs after taxes. (7 points: Part I - 1 point; Part II - 2 points; Part III - 1 point; Part IV - 2 points; Part V - 1 point) Single Taxable income is over But not over The tax is Plus Of the amount over $0 $8,350 $0.00 10% $0 $8,350 $33,950 $835.00 15% $8,350 $33,950 $82,250 $4,675.00 25% $33,950 $82,250 $171,550 $16,750.00 28% $82,250 $171,550 $372,950 $41,754.00 33% $171,550 $372,950 $108,216.00 35% $372,950 Part I: What would Jillian's annual taxable income be if she took job A? Part II: How much would Jillian have to pay in federal income taxes if she took job A? How much would job A pay after taxes? Part III: What would Jillian's annual taxable income be if she took job B? Part IV: How much would Jillian have to pay in federal income taxes if she took job B? How much would job B pay after taxes? Part V: What is the difference in pay between the two jobs after taxes?

Answer 1

Explanation:

Part I:

Job A salary is 41,900$.

Annual Tax Income: $41,900 - $5,700 - $3,650

= $32,550

Part II:

Using Part I, we know the annual tax so to find the federal income tax payment, use the equation:

Tax = ( $32,550 - $9,950 ) * 0.12

= $2,712.

Thats the federal tax payment amount.

To find payment after tax: Net pay = Annual salary - Federal Imcome Taxes.

Net pay = $41,900 - $2,712

= $39,188

Part III:

Job B salary: $44,700

Annual Tax Income = $44,700 - $5,700 - $3,650

= $35,350

Part IV:

Similar to Part II, use the equation:

Tax = ( #35,350 - $9,950 ) * 0.12

= $3,048

Federal Tax Income: $3,048

Payment after tax is:

Net pay = $44,700 - $3,048

= $41,652

Part V:

Difference in pay = Net pay B - Net pay A

( $41,652 - $39,188 )

= $2,464.