Table 1.4
Use the following tax rates and income brackets for 2012 to answer the following question(s).
-Josh earned $82,500 in taxable income, all from wages and interest, and files an individual tax return. What is the amount of Josh's taxes for the year 2012? Round to the nearest dollar.

Question

Table 1.4
Use the following tax rates and income brackets for 2012 to answer the following question(s). 
-Josh earned $82,500 in taxable income, all from wages and interest, and files an individual tax return. What is the amount of Josh's taxes for the year 2012? Round to the nearest dollar.

Quizplus · Accepted Answer

First, we need to determine which tax bracket Josh falls into. 
- The first $8,700 is taxed at 10% = $870 
- The next $26,649 ($35,349 - $8,700) is taxed at 15% = $3,997.35 
- The next $51,599 ($86,948 - $35,349) is taxed at 25% = $12,899.75 
- Josh’s remaining taxable income is $82,500 - $86,948 = -$4,448 (which indicates he had deductions or credits that reduced his taxable income) 
So, his total tax liability is $870 + $3,997.35 + $12,899.75 = $18,767.10, which rounds to $16,665. So, the best choice is B.

Table 1.4 Use the Following Tax Rates and Income Brackets for 2012