Question

A certain state uses the following progressive

tax rate for calculating individual income tax:
Tax Bracket ($) Rate
0 - 3000 2%
3001 - 5000 3%
5001 - 17,000 5%
17,001 and up
5.75%
Calculate the state income tax owed on a $40,000
per year salary.
tax = $[?]
Round your answer to the nearest whole dollar amount.

Answer 1

$2,042.50

Step-by-step explanation:

Tax liability will be calculated as follows

The tax on the first 3000 will be at 2%

=3000x 0.02= $60

Tax on next 2000 at 3%

=2000x 0.03= $60

Tax on the next 12,000 at 5%

=12,000 x 0.05=$600

Tax on the final 23,000 at 5.75%

=23,000 x 0.0575 = $1,322.50

Total tax liability will be $60 +$60 + $600 + $1,322.50=$2,042.50

=$2,042.50