Question

bernard paid an income tax of $1474 for the year 2018. Of his gross annual income, the amount he paid will not be subjected to income tax....

Answer 1

The annual gross income of Bernard is $53,200.

According to the statement

we have to find that the gross annual income which is subjected to the tax.

So, For this purpose, we have given information that is:

he has a wife, 4 children and 2 parents.

And the income required for all this is :

For himself = $3000

For wife = $2000

For 4 children = $4000*4 = $16000

For 2 parents = $5000 *2 = $10,000

And then

He paid an income tax of $1474 for the year 2018.

And

the gross tax payable for the first $40,000 is $550 and the tax rate for the rest is 7%.

Then

If tax for first 40,000 is 550 then it is clear that the annual amount is more than the 40,000.

So,

Left amount he pays as tax for more than 40,000 = 1474 - 550

Left amount he pays as tax for more than 40,000 = 924

An from given information:

The amount 924 behaves as the 7% of the income more than 40,000 then

924 = 7 /100 * x

here x is the income for which he pays 7% tax

then

924 = 7 /100 * x

92400 = 7x

x = 92400/7

x = 13,200.

The total gross income become = 40,000 + 13,200

The total gross income become = $53,200.

So, The annual gross income of Bernard is $53,200.

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Bernard paid an income tax of $1474 for the year 2018. Of his gross annual income, the amount he paid will not be subjected to income tax

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