Questions: The income tax rate schedule for a person filing a single return in 2018 is: Taxable Income Taxes 0-9,525 10% of taxable income 9,526-38,700 952.50 + 12% of the amount over 9,525 38,701-82,500 4,453.50 + 22% of the amount over 38,700 82,501-157,500 14,089.50 + 24% of the amount over 82,500 157,501-200,000 32,089.50 + 32% of the amount over 157,500 200,001-500,000 45,689.50 + 35% of the amount over 200,000 500,001 or more Sheila works as a student tutor and paid 796 in federal taxes in 2018. Determine Sheila's taxable income. Logan works as a caddy at a golf course and paid 1933.50 in federal taxes in 2018. Determine Logan's taxable income.

The income tax rate schedule for a person filing a single return in 2018 is:
Taxable Income Taxes
0-9,525 10% of taxable income
9,526-38,700 952.50 + 12% of the amount over 9,525
38,701-82,500 4,453.50 + 22% of the amount over 38,700
82,501-157,500 14,089.50 + 24% of the amount over 82,500
157,501-200,000 32,089.50 + 32% of the amount over 157,500
200,001-500,000 45,689.50 + 35% of the amount over 200,000
500,001 or more

Sheila works as a student tutor and paid 796 in federal taxes in 2018. Determine Sheila's taxable income.

Logan works as a caddy at a golf course and paid 1933.50 in federal taxes in 2018. Determine Logan's taxable income.
Transcript text: The income tax rate schedule for a person filing a single return in 2018 is: Taxable Income Taxes $0-$9,525 10% of taxable income $9,526-$38,700 $952.50 + 12% of the amount over $9,525 $38,701-$82,500 $4,453.50 + 22% of the amount over $38,700 $82,501-$157,500 $14,089.50 + 24% of the amount over $82,500 $157,501-$200,000 $32,089.50 + 32% of the amount over $157,500 $200,001-$500,000 $45,689.50 + 35% of the amount over $200,000 $500,001 or more Sheila works as a student tutor and paid $796 in federal taxes in 2018. Determine Sheila's taxable income. Logan works as a caddy at a golf course and paid $1933.50 in federal taxes in 2018. Determine Logan's taxable income.
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Solution

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To determine Sheila's and Logan's taxable incomes based on the federal taxes they paid in 2018, we need to use the given tax rate schedule.

Sheila's Taxable Income:

Sheila paid $796 in federal taxes. We need to find the tax bracket that corresponds to this amount.

  1. $0-$9,525: 10% of taxable income
    • If Sheila's taxable income was in this bracket, her tax would be 10% of her income.
    • To find the income, we set up the equation: 0.10 * Income = $796
    • Solving for Income gives: Income = $796 / 0.10 = $7,960

Since $7,960 falls within the $0-$9,525 bracket, Sheila's taxable income is $7,960.

Logan's Taxable Income:

Logan paid $1,933.50 in federal taxes. We need to find the tax bracket that corresponds to this amount.

  1. $0-$9,525: 10% of taxable income

    • Maximum tax in this bracket: 0.10 * $9,525 = $952.50
  2. $9,526-$38,700: $952.50 + 12% of the amount over $9,525

    • If Logan's taxable income was in this bracket, his tax would be $952.50 + 0.12 * (Income - $9,525).
    • Set up the equation: $952.50 + 0.12 * (Income - $9,525) = $1,933.50
    • Solving for Income:
      • $1,933.50 - $952.50 = 0.12 * (Income - $9,525)
      • $981 = 0.12 * (Income - $9,525)
      • Income - $9,525 = $981 / 0.12
      • Income - $9,525 = $8,175
      • Income = $8,175 + $9,525 = $17,700

Since $17,700 falls within the $9,526-$38,700 bracket, Logan's taxable income is $17,700.

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