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What would Eddie's tax liability be?Eddie, a single taxpayer, has W-2 income of...
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Using the income brackets and the marginal rates for each of them mentioned here, Eddie's income of $42,487 can be divided as follows:
$42,487 = $ 8,375 + ($34000 - $8375) + ($42487 - $34000)
=> $8375 + $25625 + $8487
The tax for $8375 is 10% of 8375 = $837.5
The tax for $ 25625 is 15% of 25625 = 3843.75
The tax for $8487 is 25% of $8487 = 2121.75
This gives the total tax as $837.5 + $3843.75 + $2121.75 = $6803
I guess the decimals have been eliminated in the calculation done to arrive at the income tax in the options you have provided.
That would make the correct income tax $6800 or option D.
Posted by justaguide on April 9, 2011 at 1:35 PM (Answer #1)
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