Question

Assume the marginal tax rate is 10% for the first $20,000 of taxable income, 25% for taxable income from $20,001 to $50,000, and 35% for taxable income above $50,000. If Mr. Smith had taxable income of $80,000, how much tax does he owe

Answer 1

the tax amount is $20,000

Step-by-step explanation:

The computation of the tax amount is given below:

= 10% of $20,000 + ($50,000 - $20,001) × 25% + ($80,000 - $50,000) × 35%

= $2,000 + $7,499.75 + $10,500

= $19,999.75

= $20,000

hence, the tax amount is $20,000

The same should be considered and relevant too