Question

Gloria earns $30,000 per year. The income tax rate on incomes up to $20,000 is 8 percent. The rate on income between $20,001 and $35,000 is 12 percent. Which of the following is true? A) Gloria owes $2,400 in income tax. B) Gloria owes $3,600 in income tax. C) Gloria owes $2,600 in income tax. D) Gloria owes $3,200 in income tax.

Answer 1

Gloria owes $2,800 in income tax.

Step-by-step explanation:

To calculate Gloria's income tax, we need to determine her taxable income and apply the relevant tax rates. Since Gloria earns $30,000 per year, her taxable income is $30,000. Here's how to calculate her income tax:

1. Calculate the tax on the income up to $20,000 at a rate of 8%. The tax on this portion is $20,000 * 0.08 = $1,600.
2. Calculate the tax on the income between $20,001 and $30,000 at a rate of 12%. The tax on this portion is ($30,000 - $20,000) * 0.12 = $1,200.
3. Add the two calculated taxes to get the total income tax owed: $1,600 + $1,200 = $2,800.

Therefore, Gloria owes $2,800 in income tax.