Select The Correct Answer.Based On The Following Tax Table, How Is The Tax Payable On A Taxable Income Of $\$ 64,000$$ Calculated?\[\begin{tabular}{|c|c|}\hline\text{Taxable Income} & \text{Tax Rate} \\\hline\$ 0 \text{ To }

Introduction

Taxation is a complex process that involves understanding various tax rates and brackets. In this article, we will explore how to calculate tax payable on a taxable income of $64,000 using a given tax table. We will break down the process into simple steps, making it easy to understand and apply.

Tax Table

The tax table provided is as follows:

Calculating Tax Payable

To calculate the tax payable on a taxable income of $64,000, we need to follow these steps:

Step 1: Identify the Taxable Income Bracket

The taxable income of $64,000 falls within the range of $45,000 to $120,000. This means that we will use the tax rate of 32.5% for this bracket.

Step 2: Calculate the Tax Payable for the First Bracket

The first bracket is from $0 to $18,201, which has a tax rate of 0%. Since the taxable income of $64,000 is above this bracket, we do not need to calculate the tax payable for this bracket.

Step 3: Calculate the Tax Payable for the Second Bracket

The second bracket is from $18,201 to $45,000, which has a tax rate of 19%. However, since the taxable income of $64,000 is above this bracket, we need to calculate the tax payable for this bracket. The amount of taxable income that falls within this bracket is $45,000 - $18,201 = $26,799. The tax payable for this bracket is $26,799 x 19% = $5,072.81.

Step 4: Calculate the Tax Payable for the Third Bracket

The third bracket is from $45,000 to $120,000, which has a tax rate of 32.5%. The amount of taxable income that falls within this bracket is $64,000 - $45,000 = $19,000. The tax payable for this bracket is $19,000 x 32.5% = $6,175.

Step 5: Calculate the Total Tax Payable

The total tax payable is the sum of the tax payable for each bracket. In this case, the total tax payable is $5,072.81 + $6,175 = $11,247.81.

Conclusion

Calculating tax payable on a taxable income of $64,000 using the provided tax table involves identifying the taxable income bracket, calculating the tax payable for each bracket, and summing up the results. By following these steps, we can determine the total tax payable, which in this case is $11,247.81.

Tax Payable Calculation Summary

What's Next?

Introduction

Calculating tax payable on a taxable income can be a complex process, especially for those who are new to taxation. In this article, we will address some of the most frequently asked questions related to tax payable calculation.

Q: What is the tax payable on a taxable income of $80,000?

A: To calculate the tax payable on a taxable income of $80,000, we need to follow the same steps as before. The taxable income of $80,000 falls within the range of $45,000 to $120,000, which has a tax rate of 32.5%. The amount of taxable income that falls within this bracket is $80,000 - $45,000 = $35,000. The tax payable for this bracket is $35,000 x 32.5% = $11,375.

Q: What is the tax payable on a taxable income of $120,000?

A: To calculate the tax payable on a taxable income of $120,000, we need to follow the same steps as before. The taxable income of $120,000 falls within the range of $120,000 to $180,000, which has a tax rate of 37%. The amount of taxable income that falls within this bracket is $120,000 - $120,000 = $0. However, we need to calculate the tax payable for the previous bracket, which is from $45,000 to $120,000. The amount of taxable income that falls within this bracket is $120,000 - $45,000 = $75,000. The tax payable for this bracket is $75,000 x 32.5% = $24,375. Additionally, we need to calculate the tax payable for the current bracket, which is from $120,000 to $180,000. The amount of taxable income that falls within this bracket is $180,000 - $120,000 = $60,000. The tax payable for this bracket is $60,000 x 37% = $22,200. The total tax payable is $24,375 + $22,200 = $46,575.

Q: What is the tax payable on a taxable income of $180,000?

A: To calculate the tax payable on a taxable income of $180,000, we need to follow the same steps as before. The taxable income of $180,000 falls within the range of $180,000 to above $180,000, which has a tax rate of 45%. The amount of taxable income that falls within this bracket is $180,000 - $180,000 = $0. However, we need to calculate the tax payable for the previous bracket, which is from $120,000 to $180,000. The amount of taxable income that falls within this bracket is $180,000 - $120,000 = $60,000. The tax payable for this bracket is $60,000 x 37% = $22,200. Additionally, we need to calculate the tax payable for the current bracket, which is above $180,000. The amount of taxable income that falls within this bracket is $180,000 - $180,000 = $0. However, we need to calculate the tax payable for the previous bracket, which is from $120,000 to $180,000. The amount of taxable income that falls within this bracket is $180,000 - $120,000 = $60,000. The tax payable for this bracket is $60,000 x 37% = $22,200. The total tax payable is $22,200 + $22,200 = $44,400.

Q: What is the tax payable on a taxable income of $250,000?

A: To calculate the tax payable on a taxable income of $250,000, we need to follow the same steps as before. The taxable income of $250,000 falls within the range of above $180,000, which has a tax rate of 45%. The amount of taxable income that falls within this bracket is $250,000 - $180,000 = $70,000. The tax payable for this bracket is $70,000 x 45% = $31,500.

Conclusion

Calculating tax payable on a taxable income can be a complex process, but by following the steps outlined in this article, you can determine the total tax payable. Remember to always follow the tax table and calculate the tax payable for each bracket separately.

Tax Payable Calculation Summary

What's Next?

In the next article, we will explore how to calculate tax payable on a taxable income of $300,000 using the same tax table. We will break down the process into simple steps, making it easy to understand and apply. Stay tuned!