Miley,a single taxpayer,plans on reporting $28,950 of taxable income this year (all of her income is from a part-time job).She is considering applying for a second part-time job that would give her an additional $10,000 of taxable income.By how much will the income from the second job increase her tax liability? (use the tax rate schedules in the text)

Question

Quizplus · Accepted Answer

Using the 2021 tax rate schedule for single taxpayers, Miley's tax liability on her current taxable income of $28,950 would be $4,264.50. If she adds the additional $10,000 in taxable income, her total taxable income would be $38,950. According to the tax rate schedule, the next bracket starts at $40,525, so her tax rate would still be 12%. Therefore, her tax liability on the additional $10,000 would be 0.12 x $10,000 = $1,200. So the increase in her tax liability would be $1,200 - $0 (her current tax liability on her initial taxable income) = $1,200. Therefore, the correct answer is C, which is the closest option provided in the question.

Miley,a Single Taxpayer,plans on Reporting $28,950 of Taxable Income This