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Steve had a gross income of \[tex]$86,100 in 2009. When filing his federal income tax return, he took the standard deduction of \$[/tex]5,700, claimed only himself as an exemption for \[tex]$3,650, and did not have any other adjustments to income. According to the following table, which income tax bracket did he fall into?
2. Calculate the total deductions: - Standard deduction: [tex]\( \$ 5700 \)[/tex] - Personal exemption for himself: [tex]\( \$ 3650 \)[/tex]
3. Compute the total deductions: [tex]\[
5700 + 3650 = 9350 \text{ dollars}
\][/tex]
4. Calculate the taxable income by subtracting the total deductions from the gross income: [tex]\[
86100 - 9350 = 76750 \text{ dollars}
\][/tex]
5. Determine the tax bracket by comparing the taxable income to the provided tax bracket table:
- Taxable income over [tex]\( \$ 0 \)[/tex] but not over [tex]\( \$ 8350 \)[/tex] → 10% - Taxable income over [tex]\( \$ 8350 \)[/tex] but not over [tex]\( \$ 33950 \)[/tex] → 15% - Taxable income over [tex]\( \$ 33950 \)[/tex] but not over [tex]\( \$ 82250 \)[/tex] → 25% - Taxable income over [tex]\( \$ 82250 \)[/tex] but not over [tex]\( \$ 171550 \)[/tex] → 28% - Taxable income over [tex]\( \$ 171550 \)[/tex] but not over [tex]\( \$ 372950 \)[/tex] → 33% - Taxable income [tex]\( \$ 372950+ \)[/tex] → 35%
Steve's taxable income is [tex]\( 76750 \)[/tex] dollars, which falls within the range [tex]\( 33950 \)[/tex] to [tex]\( 82250 \)[/tex] dollars.
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