Gwen's marginal tax bracket is 24%.Under the terms of a divorce decree settled in 2018,Gwen pays alimony of $24,000 per year.Gwen's after tax cost for the $24,000 payment is

Question

Quizplus · Accepted Answer

Gwen's marginal tax bracket is 24%, so she will owe 24% in federal income taxes on the $24,000 alimony payment.

$24,000 x 0.24 = $5,760 in federal income taxes owed on the payment.

Therefore, Gwen's after-tax cost for the $24,000 alimony payment is:

$24,000 - $5,760 = $18,240.

So, the correct answer is C ($18,240).

Gwen's Marginal Tax Bracket Is 24