What is the amount of the tax liability for a single person having taxable income of $59,200? All answers should be rounded to the nearest dollar.
To calculate the tax liability for a single person with a taxable income of $59,200, we can use the marginal tax rates and apply them to the different tax brackets.
The U.S. federal tax system uses a progressive tax structure with multiple tax brackets. Each bracket has a different tax rate that applies to a specific range of income.
For the year 2021, let's use the tax brackets for single individuals:
- The first tax bracket is 10% for taxable income up to $9,950.
- The second tax bracket is 12% for taxable income between $9,951 and $40,525.
- The third tax bracket is 22% for taxable income between $40,526 and $86,375.
- Finally, the fourth tax bracket is 24% for taxable income above $86,375.
To calculate the tax liability, we calculate the tax owed within each tax bracket and then sum them up.
In this case, the taxable income of $59,200 falls into the second tax bracket. To find the amount of tax owed within this bracket, we need to know the income in this bracket and the corresponding tax rate.
The income within this bracket is:
$59,200 (taxable income) - $40,525 (upper limit of the previous bracket) = $18,675.
Now we multiply this income by the tax rate for the second tax bracket, which is 12%:
$18,675 * 0.12 = $2,241
So, the tax owed within the second tax bracket is $2,241.
To determine the total tax liability, we need to consider the tax owed in the previous brackets as well. Since the taxable income of $59,200 falls within the second bracket, we don't need to consider the first bracket for this calculation.
Adding up the tax owed within the second bracket ($2,241) will give us the total tax liability for a single person with a taxable income of $59,200.
Therefore, the tax liability for a single person with a taxable income of $59,200 is approximately $2,241.