What is the tax liability for an individual with $52,000 of income, which includes $2,000 of dividends, if the tax rate is 15 percent on income up to $25,350 and 28 percent on income over $25,350?

Question

Quizplus · Accepted Answer

First, we need to calculate the amount of income that is subject to the 15% tax rate and the amount that is subject to the 28% tax rate.

For income up to $25,350: 
$25,350 - $0 = $25,350 (15% tax rate)

For income over $25,350: 
$52,000 - $25,350 = $26,650 (28% tax rate)

Next, we calculate the tax liability for each part of the income:

$25,350 x 0.15 = $3,802.50
$26,650 x 0.28 = $7,461.50

Finally, we add the tax liabilities together to get the total tax liability:

$3,802.50 + $7,461.50 = $11,264.50

Therefore, the best choice is B.

What Is the Tax Liability for an Individual with $52,000