Jack pay income tax at the rate of $35416 plus 45cent for every dollar earned in excess of $85000. Find her total taxable income if she pays $39637 in tax.
85000 + [(39637 - 35416) / .45]
39637 - 35416 = 4221
4221 / 0.45 = 9,380
85,000 + 9,380 = 94,380
To find Jack's total taxable income, we can use the information provided in the question. Let's break down the given information:
1. Jack pays income tax at the rate of $35,416.
2. Jack pays an additional 45 cents for every dollar earned in excess of $85,000.
3. Jack's total tax paid is $39,637.
Now, let's calculate Jack's taxable income step by step:
Step 1: Determine the amount of income subject to the additional 45 cent tax rate.
We know that for every dollar earned above $85,000, Jack pays an additional 45 cents. So, we need to find the excess income.
Excess income = Total tax paid - Tax paid at $35,416 rate
Excess income = $39,637 - $35,416 = $4,221
Step 2: Calculate the taxable income above $85,000.
To find the taxable income above $85,000, we divide the excess income by the additional tax rate (45 cents or $0.45).
Taxable income above $85,000 = Excess income / Additional tax rate
Taxable income above $85,000 = $4,221 / $0.45 = $9,380
Step 3: Calculate the total taxable income.
To find the total taxable income, we need to add the taxable income above $85,000 to the threshold income.
Total taxable income = Taxable income above $85,000 + Threshold income
Total taxable income = $9,380 + $85,000 = $94,380
Therefore, Jack's total taxable income is $94,380.