mr allen has a wife and 3 kids,his salary for 2007 was 7500 per month
He has a husband allowance of $10,000
a wife allowance $5000
each child allowance $2500
22% of the taxable income
Taxable income =Annual Salary-Total allowances
1)Calculate Mr Allens income tax for 2007
2)what % of Mr Allen's annual salary was paid in come tax?
To calculate Mr. Allen's income tax for 2007, we need to follow these steps:
Step 1: Calculate the annual salary for 2007.
Since we know that his salary per month in 2007 was $7,500, we can multiply this by 12 to get the annual salary.
Annual Salary = Monthly Salary * 12 = $7,500 * 12 = $90,000
Step 2: Calculate the total allowances.
Mr. Allen has a husband allowance of $10,000, a wife allowance of $5,000, and each child has an allowance of $2,500. Since he has 3 kids, we multiply the child allowance by 3.
Total Allowances = Husband Allowance + Wife Allowance + (Child Allowance * Number of Children)
Total Allowances = $10,000 + $5,000 + ($2,500 * 3) = $10,000 + $5,000 + $7,500 = $22,500
Step 3: Calculate the taxable income.
Taxable Income = Annual Salary - Total Allowances
Taxable Income = $90,000 - $22,500 = $67,500
Step 4: Calculate the income tax.
Income Tax = Taxable Income * Tax Rate
Income Tax = $67,500 * 0.22 = $14,850
Therefore, Mr. Allen's income tax for 2007 is $14,850.
To calculate the percentage of Mr. Allen's annual salary that was paid in income tax, we can use the following formula:
Percentage of Income Tax = (Income Tax / Annual Salary) * 100
Using the values calculated above:
Percentage of Income Tax = ($14,850 / $90,000) * 100 = 16.5%
Therefore, approximately 16.5% of Mr. Allen's annual salary was paid in income tax for 2007.