Typical starting salary: 1,000$
Calculate the taxes you would have to pay on this salary. Be sure to show your calculations.
First, find your annual income tax based on this rate schedule: 100$
2013 U.S. Federal Income Tax Rates for Single Adults
• 10% on taxable income from $0 to $8,925, plus
• 15% on taxable income over $8,925 to $36,250, plus
• 25% on taxable income over $36,250 to $87,850, plus
• 28% on taxable income over $87,850 to $183,250, plus
• 33% on taxable income over $183,250 to $398,350, plus
• 35% on taxable income over $398,350 to $400,000, plus
• 39.6% on taxable income over $400,000.
Then, find your annual social security tax (6.2 percent of total income): __________________
Next, find your annual Medicare tax (1.45 percent of total income): ___________________
Now find your net annual income after taxes (subtract your federal income tax, social security tax, and Medicare tax, from your annual salary: ____________________
Now that you’ve found your net annual income, divide this number by 12 to find your net monthly income: ___________________
To calculate the taxes on a starting salary of $1,000, let's go through the steps:
1. Finding the annual income tax:
Based on the provided tax rate schedule, for a starting salary of $1,000, the taxable income falls within the 10% tax bracket. So, the annual income tax would be 10% of $1,000, which is:
$1,000 * 10% = $100.
2. Finding the annual social security tax:
The social security tax rate is 6.2% of total income. As the total income here is $1,000, the annual social security tax would be:
$1,000 * 6.2% = $62.
3. Finding the annual Medicare tax:
The Medicare tax rate is 1.45% of total income. As the total income here is $1,000, the annual Medicare tax would be:
$1,000 * 1.45% = $14.50.
4. Finding the net annual income after taxes:
To find the net annual income after taxes, subtract the federal income tax, social security tax, and Medicare tax from the annual salary:
$1,000 - $100 - $62 - $14.50 = $823.50.
5. Finding the net monthly income:
To find the net monthly income, divide the net annual income after taxes by 12:
$823.50 / 12 = $68.63.
Therefore, the taxes on a starting salary of $1,000 would be $100 for federal income tax, $62 for social security tax, and $14.50 for Medicare tax. The net monthly income would be $68.63.