Question

Salma made $20,000 in taxable income last year. Suppose the income tax rate is 10% for the first $8000 plus 14% for the amount over 8000. How much must Salma pay in income tax for last year?

Answer 1

Brittney, this is the solution:

Salma's income = $ 20,000

1st bracket = 10% for the first $ 8,000

2nd bracket = 14% for the amount over $ 8,000

Therefore,

Income tax last year = 8,000 * 0.1 + (20,000 - 8,000) * 0.14

Income tax las year = 800 + 1,680

Income tax last year = 2,480

Salma will pay $ 2,480 in income tax for last year