Assume tax rates on single individuals are 10% on taxable income up to $9,275, 15% on income of $9,276 to $37,650 and 25% on income of $37,651 to $91,150. What is the tax liability for a single individual with $52,000 of taxable income, which includes $2,000 of dividends?

total tax liability = $8771.25

Explanation:

given data

taxable income up to $9,275 single individuals = 10 %

income of $9,276 to $37,650 = 15 %

income of $37,651 to $91,150 = 25 %

solution

we know here amount upto $9,275 is

amount upto $9,275 = $9,275 * 10% = $927.50 ... 1

and

amount $9,276 to $37,650 = (37650 - 9276) * 15% = $4257.45 ... 2

and

amount $37,650 to $50,000 = (50000 - 37650) * 25% = $3587.50 ... 3

so now add all 3 equation we get

total tax liability = $927.5 + $4256.25 + $3587.5

total tax liability = $8771.25

Tax Bracket rate amount

upto $ 9,275 10% $ 927.50

next (37650-9275) $ 28,375 15% $ 4,256.25

remaining $ 14,350 25% $ 3,587.50

total $ 52,000 $ 8,771.25