IDNLearn.com offers expert insights and community wisdom to answer your queries. Our community provides timely and precise responses to help you understand and solve any issue you face.

Select the correct answer.

Sue's taxable income is [tex]\[tex]$30,000[/tex] a year after accounting for deductions. Assuming she does not apply for tax credits, what is the correct way to compute the tax she owes? Use the following tax table.
\begin{tabular}{|c|c|}
\hline Taxable Income & Tax Rate \\
\hline [tex]\$[/tex]0-\[tex]$9,875[/tex] & [tex]10\%[/tex] \\
\hline [tex]\$[/tex]9,876-\[tex]$40,125[/tex] & [tex]12\%[/tex] \\
\hline
\end{tabular}

A. [tex]12\% \times \$[/tex]30,000[/tex]

B. [tex]10\% \times \[tex]$9,875 + 12\% \times (\$[/tex]40,125 - \[tex]$30,000)[/tex]

C. [tex]10\% \times \$[/tex]9,875 + 12\% \times (\[tex]$30,000 - \$[/tex]9,875)[/tex]

D. [tex]12\% \times (\[tex]$40,125 - \$[/tex]30,000)[/tex]

E. [tex]10\% \times \[tex]$9,875 + 12\% \times \$[/tex]30,000[/tex]


Sagot :

Let's determine the correct way to compute the tax Sue owes based on her taxable income of \[tex]$30,000 using the provided tax table. First, notice that her income falls into two tax brackets: 1. The first portion of her income from \$[/tex]0 to \[tex]$9,875 is taxed at 10%. 2. The remaining portion of her income from \$[/tex]9,876 to \[tex]$30,000 is taxed at 12%. We need to calculate the tax for each portion separately and then sum them up. 1. Tax for the first slab (\( \$[/tex]0 - \[tex]$9,875 \)): \[ 10\% \times 9,875 = 0.10 \times 9,875 = 987.5 \] 2. Tax for the second slab (\( \$[/tex]9,876 - \[tex]$30,000 \)): \[ 12\% \times (30,000 - 9,875) = 0.12 \times (30,000 - 9,875) = 0.12 \times 20,125 = 2,415.0 \] Now, we sum the tax amounts from both slabs to get the total tax: \[ 987.5 + 2,415.0 = 3,402.5 \] Given this step-by-step process, the correct calculations fit option C: \[ 10 \% \times \$[/tex] 9,875 + 12 \% \times(\[tex]$ 30,000 - \$[/tex] 9,875)
\]

So, the correct answer is:

C. [tex]$10 \% \times \$[/tex] 9,875 + 12 \% \times(\[tex]$ 30,000-\$[/tex] 9,875)$