Question

2. Toby Vail.

Annual gross pay of $18,200.

Personal exemptions of $1,500.

State tax on first $3,000: 1.5 percent.

Tax on amount over $3,000:

3 percent.

Answer 1

Toby Vail wis taxed for $456

Explanation:

First, we make the deductions:

gross pay 18,200 - 1,500 deductions = 16,700 taxable income

Now, we make the tax-calculations:

first $3,000 x 0.015 = $ 45

above:

(16,700 - 3,000) x 0.03 = $411

Total tax levied from the State: $45 + $411 = $456

Notice how the tax is calcualte in brackets to solve for the different taxation rate at different income levels.