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Feliz [49]
2 years ago
12

In a certain jurisdiction caroline, who is earning $42,200, currently pays a flat percentage of 25% income tax. The tax authorit

ies suggest a change to a progressive income tac system as follows: 1. Charging 15% on a person's income up to $20,000. 2. Changing 30% on any income above that. How much less will caroline be paying in income tax under the proposed changes? round your answer to the nearest dollar.
Business
1 answer:
NISA [10]2 years ago
6 0

The amount of tax paid less by Caroline as per the new taxation policies will be $950 over her annual salary of $42,200 after the taxes are applied assuming deductions being made.

The calculation of tax saved by Caroline will be done on the basis of comparing the taxation rates of both the policies after taking the changes into account.

<h3>Calculation of tax savings</h3>

The formula for calculation of tax will be done as follows when the taxes are charged on flat basis under the old policy,

\rm Income\ Tax= Salary\ x\ Rate\ of\ Taxation\\\\\rm Income\ Tax= 42200\ x\ {\dfrac{25}{100}\\\\\\\\\\\\\\rm Income\ Tax= \$10550

The taxation for the first $20000 as per the new policy will be

\rm Income\ Tax\ Threshold= 20000\ x\ \dfrac{15}{100}\\\\\rm Income\ Tax= \$3000

Calculating further taxation,

\rm Income\ Tax= 22200\ x\ \dfrac{30}{100}\\\\\rm Income\ Tax= \$6600

So, total taxation as per the new policy will be $9600. Now comparing the taxation of old scheme with new scheme, we get,

\rm Income\ Tax\ Savings= Old\ Taxation - New\ Taxation\\\\\rm Income\ Tax\ Savings=10550-9600\\\\\rm Income\ Tax\ Savings=950

So, the total taxes saved are $950 when the taxation rate changes.

Hence, the correct statement is that tax savings of $950 is possible when the authorities change the taxation rates to such slab rates by Caroline.

Learn more about tax savings here:

brainly.com/question/2396701

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Strategic planning starts with a mission statement that reflects a firm’s vision, purpose, and values.

Strategic Planning Process: Strategic planning is the process of identifying long-term organizational goals, strategies, and resources, focusing on the horizon more than three years away.

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1 year ago
Instructing your broker to buy or sell a stock at a particular price is a:
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Trading or Marketing guides/instructions
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2 years ago
On May 1, your firm had a beginning cash balance of $175. Your sales for April were $430 and your May sales were $480. During Ma
Juli2301 [7.4K]

Answer:

Begininig cash balance June 1 205

Explanation:

Sales April 430

Sales May 480

 

Begininig cash balance May 1 175

Cash expenses                        -110

Payments                               -290

Sales april                                 430

Begininig cash balance June 1 205

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3 years ago
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2 years ago
An analyst needs to adjust the nominal GDP for the years 2000 and 2010 into real terms to conclude his comparison analysis. The
valentina_108 [34]

Answer:

The answer is: the real gain in real GDP between 2010 and 2000 is 18.34%

Explanation:

First we have to determine the real GDP using the GDP deflator.

GDP deflator = (nominal GDP / real GDP) x 100

For year 2000:

24 = ($672 billion / real GDP ) x 100

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real GDP = $0.28 billion

For year 2010:

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5 0
3 years ago
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