Chapter 3.4, Problem 21SC

Explanation of Solution

Income tax computation for single and married tax payer:

• The income tax for a person is computed based on the marital status, if the person is single, he/she comes under two brackets.
  • If the income of single tax payer is less than or equal to $32,000, then he/she must pay 10% as taxable income.
  • If the income of single tax payer is greater than $32,000, then he/she must pay 10% as taxable income for $32,000, and 25% for the additional income.
  • If the income of married couple is less than or equal to $64,000, then they must pay 10% as taxable income.
  • If the income of married couple is greater than $64,000, then they must pay 10% as taxable income for $64,000, and 25% for the additional income...