Math

QuestionMiss Lee's tax is \$4500. Find her net chargeable income using the tax rates: 2\% for \$40000, 7\% for next \$40000, 12\% for next \$40000, and 17\% for the rest. Round to the nearest dollar.

Studdy Solution

STEP 1

Assumptions1. The salaries tax payable is \$4500. The tax rates are as follows the first \$40000 is taxed at\%, the next \$40000 is taxed at7\%, the next \$40000 is taxed at12\%, and the remainder is taxed at17\%
3. We are looking for the net chargeable income, rounded to the nearest dollar

STEP 2

First, calculate the tax for each income bracket.For the first \40000,thetaxis2%40000, the tax is2\%Tax1=$40000times2%Tax1 = \$40000 \\times2\%Forthenext$40000,thetaxis7%For the next \$40000, the tax is7\%Tax2=$40000times7%Tax2 = \$40000 \\times7\%Forthenext$40000,thetaxis12%For the next \$40000, the tax is12\%Tax=$40000times12%Tax = \$40000 \\times12\%$

STEP 3

Convert the percentages to decimal values.
2%=0.022\% =0.027%=0.077\% =0.0712%=0.1212\% =0.12

STEP 4

Calculate the tax for each income bracket.
Tax1=$40000times0.02=$800Tax1 = \$40000 \\times0.02 = \$800Tax2=$40000times0.07=$2800Tax2 = \$40000 \\times0.07 = \$2800Tax3=$40000times0.12=$4800Tax3 = \$40000 \\times0.12 = \$4800

STEP 5

Now, we can add up the tax amounts for the first three income brackets.Totaltax=Tax1+Tax2+Tax3Total\, tax = Tax1 + Tax2 + Tax3

STEP 6

Calculate the total tax for the first three income brackets.
Totaltax=$800+$2800+$4800=$8400Total\, tax = \$800 + \$2800 + \$4800 = \$8400

STEP 7

Since the total tax for the first three income brackets (\$8400) is more than the salaries tax payable (\$4500), we know that Miss Lee's income falls within the third bracket.Now, we need to find out how much of the third bracket's income Miss Lee has earned. We do this by subtracting the tax amounts of the first two brackets from the salaries tax payable.
Income3=(SalariestaxpayableTax1Tax2)/TaxrateofthirdbracketIncome3 = (Salaries\, tax\, payable - Tax1 - Tax2) / Tax\, rate\, of\, third\, bracket

STEP 8

Plug in the values to calculate the income from the third bracket.
Income3=($4500$800$2800)/0.12Income3 = (\$4500 - \$800 - \$2800) /0.12

STEP 9

Calculate the income from the third bracket.
Income3=($450$800$280)/.12=$24166.67Income3 = (\$450 - \$800 - \$280) /.12 = \$24166.67

STEP 10

Now, we can add up the incomes from all three brackets to find Miss Lee's net chargeable income.
Netchargeableincome=$40000+$40000+Income3Net\, chargeable\, income = \$40000 + \$40000 + Income3

STEP 11

Plug in the value for the income from the third bracket.
Netchargeableincome=$40000+$40000+$24166.67Net\, chargeable\, income = \$40000 + \$40000 + \$24166.67

STEP 12

Calculate the net chargeable income.
Netchargeableincome=$40000+$40000+$24166.67=$104167Net\, chargeable\, income = \$40000 + \$40000 + \$24166.67 = \$104167Miss Lee's net chargeable income, rounded to the nearest dollar, is \$104167.

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