Mrs. Howe has a gross income of $9,800 per year. Her deductions amount to $3,650. She pays state income taxes

Question

at the rate of 2% on the first $1,000 of taxable income, 3% on the next $2,000 of taxable income and 4% on the balance. Her total tax is

(1) $146 (2) $140 (3) $126

(4) $206 (5) $$137.50

Please explain.

Answer 1

Gross = 9800

Net = 9800-3650 = 6150

2% of 1000 = 20

3% of 2000 = 60

4% of 6800 (9800-1000-2000) = 272

Therefore: 272+60+20 = 352

Based on the state:

3650

2% of 1000 = 20

3% of 2000 = 60

4% of 650 (3650-1000-2000) = 26

Therefore $106

None of the answers you have given are possible, all i can say is my math is correct.

Answer 2

(4) $206

Gross income - Deductions =Taxable income

$9,800-$3,650=$6,150

Total tax = 0.02x$1,000 + 0.03x$2000 + ($6,150-$3,000)x0.04 = $206