Income tax for some states is computed by taking 3% of the excess income over $3,000 plus 1% of the first $3,000. How much tax is charged on a income of $2,000?
To calculate the tax charged on an income of $2,000 using the given formula, we can follow these steps:
Step 1: Determine the excess income over $3,000.
Excess Income = Income - $3,000
Excess Income = $2,000 - $3,000 = -$1,000
Step 2: Check if the excess income is less than or equal to zero.
In this case, the excess income is less than zero, which means there is no taxable income above $3,000. Therefore, there is no tax charged on an income of $2,000.
In summary, no tax is charged on an income of $2,000 according to the given income tax computation formula.