If your taxable income is Over- But not Over- $0 $9,275 $9,275 $37,650 $37,650 $91,150 $91,150 $190,150 $190,150 $413,350 $413,350 ***** The tax is .........10% $927.50 +15% $5,183.75 +25% $18,558.75+28% $46,278.75 +33% $119,934.75 +35% Of the amount Over- $0 $9,275 $37,650 $91,150 $190,150 $413,350
If your taxable income is Over- But not Over- $0 $9,275 $9,275 $37,650 $37,650 $91,150 $91,150 $190,150 $190,150 $413,350 $413,350 ***** The tax is .........10% $927.50 +15% $5,183.75 +25% $18,558.75+28% $46,278.75 +33% $119,934.75 +35% Of the amount Over- $0 $9,275 $37,650 $91,150 $190,150 $413,350
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Use the table and find the income tax for an income of 279,000
Transcribed Image Text:### Tax Bracket Chart
This table illustrates the federal tax brackets for a given year, showing how taxable income is taxed in increments.
#### Tax Brackets:
| If your taxable income is Over— | But not Over— | The tax is | Of the amount Over— |
| --- | --- | --- | --- |
| $0 | $9,275 | ........10% | $0 |
| $9,275 | $37,650 | $927.50 + 15% | $9,275 |
| $37,650 | $91,150 | $5,183.75 + 25% | $37,650 |
| $91,150 | $190,150 | $18,558.75 + 28% | $91,150 |
| $190,150 | $413,350 | $46,278.75 + 33% | $190,150 |
| $413,350 | ........ | $119,934.75 + 35% | $413,350 |
#### Explanation:
1. **First column ("If your taxable income is Over—")**: This represents the lower boundary of the income range.
2. **Second column ("But not Over—")**: This indicates the upper boundary of the income range.
3. **Third column ("The tax is")**: This specifies the base tax amount and the percentage rate applied to the portion of taxable income that exceeds the lower boundary of the range.
4. **Fourth column ("Of the amount Over—")**: This highlights the amount of income subject to the corresponding tax rate.
#### Detailed Description of Tax Calculations:
To compute the tax for a specific taxable income within a particular range:
- **Identify the income range** within which your taxable income falls.
- **Calculate the base tax** plus the percentage rate specified in the table.
- **Apply the percentage rate** to the difference between your taxable income and the lower boundary of the range.
For example, if your taxable income is $50,000:
- It falls within the range of $37,650 - $91,150.
- The tax calculation is $5,183.75 plus 25% of ($50,000 - $37,650), which is $5,183.75 plus 25% of $12,350.
- Therefore, the additional tax is $3,087.50 (25% of $12,350).
- Your
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