Select The Correct Answer From Each Drop-down Menu.Drew Is Filing His Tax Return As A Single Taxpayer. His Taxable Income Is $ 39 , 000 \$39,000 $39 , 000 . Use The Tax Table Provided To Compute Drew's Tax Due And Effective Tax Rate.[\begin{array}{|c|l|l|}\hline
Introduction
Calculating tax due and effective tax rate is an essential task for individuals filing their tax returns. In this article, we will guide you through the process of determining Drew's tax due and effective tax rate using the provided tax table.
Understanding Taxable Income
Taxable income is the amount of income that is subject to taxation. It is calculated by subtracting deductions and exemptions from the total income. In Drew's case, his taxable income is .
Tax Table Provided
The tax table provided is a table that outlines the tax rates and corresponding tax amounts for different levels of taxable income. The table is as follows:
| Taxable Income | Tax Amount |
|---|---|
| $0 - $9,875 | $0 |
| $9,876 - $40,125 | $1,239 + 24% of the amount over $9,875 |
| $40,126 - $80,250 | $9,013 + 24% of the amount over $40,125 |
| $80,251 and above | $18,551 + 24% of the amount over $80,250 |
Calculating Tax Due
To calculate Drew's tax due, we need to determine which tax bracket he falls into. Since his taxable income is , he falls into the second tax bracket, which is $9,876 - $40,125.
Using the tax table, we can calculate Drew's tax due as follows:
- Tax amount for the first $9,875 is $0
- Tax amount for the amount between $9,876 and $40,125 is $1,239 + 24% of the amount over $9,875
- Since Drew's taxable income is $39,000, the amount over $9,875 is $39,000 - $9,875 = $29,125
- The tax amount for the amount between $9,876 and $40,125 is $1,239 + 24% of $29,125 = $1,239 + $7,000 = $8,239
Therefore, Drew's tax due is $8,239.
Calculating Effective Tax Rate
Effective tax rate is the ratio of tax due to taxable income. It is calculated by dividing tax due by taxable income.
In Drew's case, his tax due is $8,239 and his taxable income is $39,000. Therefore, his effective tax rate is:
Effective tax rate = Tax due / Taxable income = $8,239 / $39,000 = 0.21 or 21%
Conclusion
In conclusion, we have calculated Drew's tax due and effective tax rate using the provided tax table. His tax due is $8,239 and his effective tax rate is 21%. This calculation is essential for individuals filing their tax returns to determine their tax liability.
Taxable Income and Effective Tax Rate Calculation Summary
| Taxable Income | Tax Amount | Effective Tax Rate |
|---|---|---|
| $39,000 | $8,239 | 21% |
Discussion
The tax table provided is a simplified example of a tax table. In reality, tax tables can be more complex and may have multiple tax brackets. Additionally, tax rates and tax amounts may vary depending on the country, state, or province.
Mathematical Concepts Used
- Taxable income
- Tax due
- Effective tax rate
- Tax table
- Tax brackets
- Tax rates
Real-World Applications
Calculating tax due and effective tax rate is essential for individuals filing their tax returns. It helps them determine their tax liability and make informed decisions about their financial planning.
Future Research Directions
- Developing more complex tax tables that take into account multiple tax brackets and tax rates
- Investigating the impact of tax policy changes on tax due and effective tax rate
- Developing tools and software to simplify tax calculation and planning
References
Appendix
The tax table provided is a simplified example of a tax table. In reality, tax tables can be more complex and may have multiple tax brackets. The following is an example of a more complex tax table:
| Taxable Income | Tax Amount |
|---|---|
| $0 - $9,875 | $0 |
| $9,876 - $20,000 | $1,239 + 12% of the amount over $9,875 |
| $20,001 - $40,000 | $2,439 + 22% of the amount over $20,000 |
| $40,001 - $80,000 | $5,439 + 24% of the amount over $40,000 |
| $80,001 and above | $12,439 + 24% of the amount over $80,000 |
Introduction
In our previous article, we discussed how to calculate taxable income and effective tax rate using a tax table. In this article, we will answer some frequently asked questions (FAQs) related to taxable income and effective tax rate.
Q: What is taxable income?
A: Taxable income is the amount of income that is subject to taxation. It is calculated by subtracting deductions and exemptions from the total income.
Q: How is taxable income calculated?
A: Taxable income is calculated by subtracting deductions and exemptions from the total income. For example, if your total income is $50,000 and you have deductions and exemptions of $10,000, your taxable income would be $40,000.
Q: What is effective tax rate?
A: Effective tax rate is the ratio of tax due to taxable income. It is calculated by dividing tax due by taxable income.
Q: How is effective tax rate calculated?
A: Effective tax rate is calculated by dividing tax due by taxable income. For example, if your tax due is $8,239 and your taxable income is $39,000, your effective tax rate would be 21%.
Q: What is the difference between tax due and effective tax rate?
A: Tax due is the amount of tax that is owed to the government, while effective tax rate is the ratio of tax due to taxable income. For example, if your tax due is $8,239 and your taxable income is $39,000, your effective tax rate would be 21%.
Q: How can I reduce my effective tax rate?
A: There are several ways to reduce your effective tax rate, including:
- Increasing your deductions and exemptions
- Investing in tax-deferred retirement accounts
- Taking advantage of tax credits
- Consulting with a tax professional
Q: What is the impact of tax policy changes on taxable income and effective tax rate?
A: Tax policy changes can have a significant impact on taxable income and effective tax rate. For example, changes to tax rates, deductions, and exemptions can affect the amount of tax owed and the effective tax rate.
Q: How can I stay up-to-date with tax policy changes?
A: You can stay up-to-date with tax policy changes by:
- Following tax news and updates from reputable sources
- Consulting with a tax professional
- Reviewing tax tables and guides
- Attending tax seminars and workshops
Q: What are some common tax mistakes to avoid?
A: Some common tax mistakes to avoid include:
- Failing to report all income
- Failing to claim deductions and exemptions
- Failing to file tax returns on time
- Failing to pay taxes owed
Q: How can I avoid tax penalties and fines?
A: You can avoid tax penalties and fines by:
- Filing tax returns on time
- Paying taxes owed on time
- Reporting all income
- Claiming deductions and exemptions
- Consulting with a tax professional
Conclusion
In conclusion, taxable income and effective tax rate are important concepts to understand when it comes to taxes. By answering these FAQs, we hope to have provided you with a better understanding of these concepts and how to apply them in real-life situations.
Taxable Income and Effective Tax Rate Q&A Summary
| Question | Answer |
|---|---|
| What is taxable income? | The amount of income that is subject to taxation. |
| How is taxable income calculated? | By subtracting deductions and exemptions from the total income. |
| What is effective tax rate? | The ratio of tax due to taxable income. |
| How is effective tax rate calculated? | By dividing tax due by taxable income. |
| What is the difference between tax due and effective tax rate? | Tax due is the amount of tax owed, while effective tax rate is the ratio of tax due to taxable income. |
| How can I reduce my effective tax rate? | By increasing deductions and exemptions, investing in tax-deferred retirement accounts, taking advantage of tax credits, and consulting with a tax professional. |
| What is the impact of tax policy changes on taxable income and effective tax rate? | Tax policy changes can have a significant impact on taxable income and effective tax rate. |
| How can I stay up-to-date with tax policy changes? | By following tax news and updates from reputable sources, consulting with a tax professional, reviewing tax tables and guides, and attending tax seminars and workshops. |
| What are some common tax mistakes to avoid? | Failing to report all income, failing to claim deductions and exemptions, failing to file tax returns on time, and failing to pay taxes owed. |
| How can I avoid tax penalties and fines? | By filing tax returns on time, paying taxes owed on time, reporting all income, claiming deductions and exemptions, and consulting with a tax professional. |