Dan just received a $2,000 end-of-year bonus from his employer.If he pays a 25 percent marginal tax rate for federal income taxes,his state income tax is 5 percent,and the Social Security tax rate is 7.65 percent,approximately how much of the $2,000 bonus will Dan have left to spend on holiday gifts?
A)$2,000
B)$1,400
C)$1,247
D)$753

Question

Quizplus · Accepted Answer

Dan's federal income tax will be 25% of $2,000 which is $500. His state income tax will be 5% of $2,000 which is $100. His Social Security tax will be 7.65% of $2,000 which is $153. Therefore, Dan will have $2,000 - $500 - $100 - $153 = $1,247 left to spend on holiday gifts.

Dan Just Received a $2,000 End-Of-Year Bonus from His Employer