An individual has earnings of $80,000 and deductible expenses of $15,000, and there is a single tax bracket of 35%. What is the after-tax income for this individual?

Question

Quizplus · Accepted Answer

First, we need to calculate the taxable income: 
$80,000 - $15,000 = $65,000 
Next, we calculate the tax owed: 
$65,000 x 0.35 = $22,750 
Finally, we calculate the after-tax income: 
$80,000 - $22,750 = $57,250 
Therefore, the after-tax income for this individual is $57,250. Taxable income = earnings - deductible expenses = $80,000 - $15,000 = $65,000
Tax payable = $65,000 x 35% = $22,750
After-tax income = earnings - tax payable = $80,000 - $22,750 = $57,250
Therefore, the answer is B.

An Individual Has Earnings of $80,000 and Deductible Expenses of $15,000