Question

Mr. Profit had a taxable income of $35,000. He figured his tax from the table above.

Answer 1

Solution:

Taxable Income = $ 35,000

As, Taxable income = Gross income - Deductions(Debts,loans,finances)

1.  Find his earned income level.

2. Enter the base amount. = $4,386

3. Find the amount over $ 31,850= $3,150

4. Multiply line 3 by 25 % = $787.50

5. Add Lines 2 and 4 = $5,173.50

6. Monthly Withholding = $ 431.13

So,Tax Paid by Mr.Profit= Taxable income-Withholding Allowances = $5,173.50 - $ 431.13= $ 4,742.37