2-3Computing Graduated State Income TaxRather than a flat percentage rate, some states have what is known as a graduated income tax.This means that your state income tax is computed at a varying rate each time you reach a newincome level. The higher your income, the greater your tax.ExampleFind the amount of state income tax deducted from each paycheck.Carla Erpelding's annual salary is $28,500. She is paid biweekly. Her personal exemptions total$1,500. The state income tax is calculated on the following graduated basis: 2.5 percent of the first$25,000 and 3.5 percent over $25,000.1. Find the taxable wages.-($28,500 $1,500) = $27,0002. Find the annual tax withheld.First $25,000: = ($25,000 x .025) = $625Over $25,000 =($27,000-$25,000) x .035 = $2,000 x .035 = $70Annual Tax = $625+ $70 = $6953. Find the tax per period.Annual TaxNumber of Pay Periods per Year = Tax Withheld per Pay Period$695.00 ÷ 26 = $26.73 tax per pay periodPracticeUsing the following graduated income tax rates, find the tax withheld per pay period.State Tax Rate2.75%3.25%5.00%Annual Income EarnedFirst $10,000Next $15,000Over $25,0001. Annual salary: $38,550; personal exemptions: $4,400; paid biweekly. Pakl2. Annual salary: $47,425; personal exemptions: $3,000; paid weekly.3. Annual salary: $29,149; personal exemptions: $2,200; paid monthly.4. Annual salary: $24,872; personal exemptions: $1,500; paid semimonthly.5. Standardized Test Practice Mitchell Gomez is an auto mechanic. His annual gross salaryis $35,500. He is married with I dependent, allowing him $3,700 in yearly personalexemptions. If his state income tax is based on the following graduated rate, how muchis withheld from his semimonthly paycheck?State Tax Rate3.25%Annual Income EarnedFirst $15,0003.60%4.90%Next $15,000Over $30,000A. $46.49 B. $54.04 C. $92.98 D. $1,115.70Copyright by The McGraw-Hill Companies, Inc. All rights reserved.Section 2-3 Study Guide

Income tax: The income tax refers to the amount that is paid by the taxpayer to the tax authority of…

Using the following graduated income tax rates, find the tax withheld per pay period. State Tax Rate Annual Income Earned 2.75% 3.25% First $10,000 Next $15,000 Over $25,000 5.00% 1. Annual salary: $38,550; personal exemptions: $4,400; paid biweekly. 2. Annual salary: $47,425; personal exemptions: $3,000; paid weekly. 3. Annual salary: $29,149; personal exemptions: $2,200; paid monthly. 4. Annual salary: $24,872; personal exemptions: $1,500; paid semimonthly.

Using the following graduated income tax rates, find the tax withheld per pay period. State Tax Rate Annual Income Earned 2.75% 3.25% First $10,000 Next $15,000 Over $25,000 5.00% 1. Annual salary: $38,550; personal exemptions: $4,400; paid biweekly. 2. Annual salary: $47,425; personal exemptions: $3,000; paid weekly. 3. Annual salary: $29,149; personal exemptions: $2,200; paid monthly. 4. Annual salary: $24,872; personal exemptions: $1,500; paid semimonthly.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter26: Tax Practice And Ethics

Section: Chapter Questions

Problem 31P

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You decide to work part-time at a local supermarket. The job pays $10.50 per hour and you work 20 hours per week. Your employer withholds 10% of your gross pay for federal taxes, 7.65% for FICA taxes, and 3% for state taxes. Complete parts (a) through (f) below. a. What is your weekly gross pay? The weekly gross pay is $ (Round to the nearest cent as needed.) b. How much is withheld per week for federal taxes? The federal taxes are (Round to the nearest cent as needed.) c. How much is withheld per week for FICA taxes? The FICA taxes are $ (Round to the nearest cent as needed.) d. How much is withheld per week for state taxes? H
1. Marginal tax brackets The amount of federal income taxes that you are required to pay is based on your filing status, your taxable income, and the IRS tax rate tables. The income tax tables are meaning the tax rates increase as taxable income increases. Each filing status has seven income ranges, or brackets, and the rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. As your taxable Income Increases, you pay at a higher rate, but only on the income that falls within a range. The following tax brackets show how the tax in the IRS tax tables is calculated. Tax Bracket Single 10% 12% $0-$11,000 $11,001-$14,725 Tax Brackets Married Filing Jointly $0-$22,000 22% $44,726-$95,375 $22,001-$89,450 $89,451-$190,750 24% $95,376-$182,100 $190,751-$364,200 32% $182,101-$231,250 $364,201-$462,500 35% $231,256-$578,125 $162,501-$693,750 37% $578,126+ $693,751+ Single Filers Taxable Income Tax $0-$11,000 of taxable income $11,001-$44,725 plus $44,726-$95,375 plus $95,376-$182,100 plus…
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4.An individual made $85,000 for the year. Using the tax given , answer the following questions: A.What is this person's marginal tax rate? B.How much tax does this person owe? C.What is the effective tax rate?