If Susie earns $750,000 in taxable income,how much tax will she pay as a single taxpayer for year 2013?

Question

Quizplus · Accepted Answer

According to the 2013 tax bracket for single taxpayers, anyone earning between $183,251 and $398,350 falls into the 33% tax bracket. Susie’s taxable income of $750,000 puts her well within this bracket. To calculate her tax liability, we first need to find out how much of her income falls within each bracket:
- First $8,925 taxed at 10% = $892.50
- Next $27,324 taxed at 15% = $4,098.60
- Next $52,427 taxed at 25% = $13,106.75
- Next $120,000 taxed at 28% = $33,600.00
- Next $146,349 taxed at 33% = $48,469.50
Total tax liability = $100,167.35
However, we need to add in the additional Medicare tax imposed on high-income earners, which is 0.9% on any income over $200,000 for single taxpayers. In Susie’s case, that would be an additional $4,596.40. 
So, the total amount of tax Susie will pay is $104,763.75, which is closest to option C.

If Susie Earns $750,000 in Taxable Income,how Much Tax Will