Use the 2010 federal income tax brackets and rates listed below to answer the following question.
Taxable Income
(income tax brackets) Tax rates
$40 970 or less 5% of taxable income less than or equal to $40 970; plus
$40 970 to $81 94 22% of taxable income greater than $40 970 and less than or equal to $91 941; plus
$81 941 to $127 021 26% of taxable income greater than $81 941 and less than or equal to $127 021; plus
Over $127 021 29% of taxable income greater than $127 021
a) Sean had a taxable income of $42 500 in 2011. How much federal income tax should he report? (assuming tax rates remain the same)
b) Sean expects his taxable income to increase by 150% in 2012. How much federal tax would he expect to pay in 2012(assuming tax rates remain the same).
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