USE THE FOLLOWING TAX RATE SCHEDULE TO ANSWER THE NEXT SIX QUESTIONS.
If taxable income is:

-An additional personal deduction of $200 would reduce Mr. Smith's tax liability by:

Question

USE THE FOLLOWING TAX RATE SCHEDULE TO ANSWER THE NEXT SIX QUESTIONS.
If taxable income is:

-An additional personal deduction of $200 would reduce Mr. Smith's tax liability by:

Quizplus · Accepted Answer

An additional personal deduction of $200 would reduce Mr. Smith's tax liability by the amount of the deduction multiplied by the tax rate for his income level. For example, if Mr. Smith's taxable income is $10,000, his tax rate is 10%, so his tax liability without the personal deduction would be $1,000. With the additional $200 personal deduction, his taxable income would be reduced to $9,800, and his tax liability would be reduced to $960 ($9,800 x 0.1). Therefore, the reduction in tax liability would be $40 ($1,000 - $960).