How much annual income tax you will have to pay if your monthly taxable income is $ 40,000
question:
a) The U.S. currently has seven federal income tax brackets, with rates of 10%, 12%, 22%, 24%, 32%, 35% and 37%. If you fall into the 37% bracket, that doesn’t mean that the entirety of your taxable income will be subject to a 37% tax. Instead, 37% is your top marginal tax rate.
|
FEDERAL TAX BRACKETS 2018 – 2019 |
Tax rate (%) |
|
$0 – $9,525 |
10 |
|
$9,526 – $38,700 |
12 |
|
$38,701 – $82,500 |
22 |
|
$82,501 – $157,500 |
24 |
|
$157,501 – $200,000 |
32 |
|
$200,001 – $500,000 |
35 |
|
$500,001+ |
37 |
i) Create a Mathematical Model that represents the aforementioned information to calculate the annual income tax.
ii) How much annual income tax you will have to pay if your monthly taxable income is $ 40,000
Rubrics
Uses information appropriately:
Applies appropriate procedures:
Answers the problem:
Annual income tax is the amount of tax computed of the taxpayer based upon the taxable income. There are different tax rate slabs which depend upon the range of taxable income. The taxable income is determined by deducting all the standard and allowable deductions from the gross income.
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