Question

Christine made $20,000 in taxable income last year. Suppose the income tax rate is 15% for the first $8000 plus 19% for the amount over $8000. How much must Christine pay in income tax for last year?

Answer 1

$3480

Explanation:

We know that the tax rate for the first $8000 is 15% and after $8000 the tax is 19%.

This means the total amount of money that Christine have to pay is equal to $8000 × 15% + ($20000 (the total) - $8000 (the amount that she already paid for the first $8000)) × 19%

This is equal to $1200 + $12000 × 19%

= $1200 + $2280

= $3480

Therefore, Christine must pay $3480 in income tax.