Question
Kala made \( \$ 40,000 \) in taxable income last year. Suppose the income tax rate is \( 10 \% \) for the first \( \$ 7000 \) plus \( 16 \% \) for the amount over \( \$ 7000 \). How much must Kala pay in income tax for last year?
Ask by Garza Knight. in the United States
Feb 03,2025
Real Tutor Solution
Tutor-Verified Answer
Answer
Kala must pay \$5,980 in income tax for last year.
Solution
To calculate Kala's income tax for last year, we'll break down the tax based on the given rates:
1. **First \( \$7,000 \) at 10%:**
\[
10\% \times \$7,000 = 0.10 \times \$7,000 = \$700
\]
2. **Remaining income at 16%:**
\[
\$40,000 - \$7,000 = \$33,000
\]
\[
16\% \times \$33,000 = 0.16 \times \$33,000 = \$5,280
\]
3. **Total Income Tax:**
\[
\$700 + \$5,280 = \$5,980
\]
**Kala must pay a total of \$5,980 in income tax for last year.**
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Simplify this solution Beyond the Answer
To calculate Kala's income tax, we’ll break it down based on the tax rates. First, for the initial \( \$ 7000 \), the tax is \( 10\% \): \[ \text{Tax on } \$ 7000 = 7000 \times 0.10 = \$ 700 \] Next, we find the income over \( \$ 7000 \). Kala's total income is \( \$ 40,000 \), so: \[ \text{Income over } \$ 7000 = 40,000 - 7,000 = 33,000 \] Now, we calculate the tax on this amount at the \( 16\% \) rate: \[ \text{Tax on } \$ 33,000 = 33,000 \times 0.16 = 5,280 \] Finally, we sum both tax amounts to find the total income tax owed: \[ \text{Total Tax} = 700 + 5,280 = \$ 5,980 \] Thus, Kala must pay \( \$ 5,980 \) in income tax for last year.
