Liam is single. He has no children and an adjusted income of $26,700. Find his income tax.
A. $1,735
B. $2,185
C. $2,732.50
D. $1,835
Please walk me through on how you got the answer..
To find Liam's income tax, we can use the progressive tax system in the United States. The progressive tax system means that different portions of income are taxed at different rates.
First, we need to determine which tax bracket Liam falls into based on his adjusted income. Here are the tax brackets for the year 2021 (the information could be outdated and may differ depending on the country and year):
- 10% on income up to $9,950
- 12% on income between $9,951 and $40,525
- 22% on income between $40,526 and $86,375
- 24% on income between $86,376 and $164,925
- 32% on income between $164,926 and $209,425
- 35% on income between $209,426 and $523,600
- 37% on income over $523,600
Liam's adjusted income of $26,700 falls into the first tax bracket, which is taxed at a rate of 10%.
To calculate Liam's income tax, we multiply his adjusted income by the tax rate. In this case, it would be:
$26,700 * 0.1 = $2,670
However, Liam is single, meaning he is eligible for a standard deduction. The standard deduction for a single individual in the year 2021 is $12,550.
To determine Liam's taxable income, we subtract the standard deduction from his adjusted income:
$26,700 - $12,550 = $14,150
Now, we need to calculate the tax on Liam's taxable income. Again, since he falls into the 10% tax bracket, we multiply his taxable income by the tax rate:
$14,150 * 0.1 = $1,415
Therefore, Liam's income tax is $1,415.
The answer is not one of the given options. Perhaps there was an error in the options or the calculations you were provided.