Question

Use the marginal tax rate chart to answer the question.

Determine the amount of taxes owed on a taxable income of $49,652.
•$4,735.38
•$6,600.44
•$7,709.92
•$10,293.44

Answer 1

$6,600.44

Explanation:

$49,652 falls into the 22% bracket.

Basically you take the taxable amount from each bracket and then multiply each by the corresponding marginal tax rate.

Then we take the income $49,652 and subtract it by the maximum of the last tax bracket which would be $41,175.

$49,652 - $41,175 = $8,477.

Multiply this by 22% = 1,864.94 then add the other brackets' taxes owed which should total to $6,600.44