Assume the marginal tax rate is 12 percent for the first $40,000 of income,28 percent for income between $40,000 and $100,000,and 30 percent for any income over $100,000.If Sarah has taxable income equal to $120,000 for the year,what is her tax bill?

Question

Quizplus · Accepted Answer

The correct answer is A. The tax bill is calculated as follows:Tax on the first $40,000 of income = $40,000 x 12% = $4,800Tax on the income between $40,000 and $100,000 = ($100,000 - $40,000) x 28% = $16,800Tax on the income over $100,000 = ($120,000 - $100,000) x 30% = $6,000Total tax bill = $4,800 + $16,800 + $6,000 = $27,600

Assume the Marginal Tax Rate Is 12 Percent for the First