Carter was recently hired for a job with an annual income of $34,000. Using the federal income rate of 15%, what amount should Carter expect to pay in federal income tax?
To calculate the federal income tax that Carter should expect to pay, we first need to determine his taxable income.
Since Carter's annual income is $34,000, we subtract the standard deduction for a single filer for the tax year 2021, which is $12,550.
$34,000 - $12,550 = $21,450
Next, we determine the tax rate for Carter's income level. For a taxable income of $21,450, the tax rate is 12% on the first $9,950 and 22% on the remaining balance.
Tax on the first $9,950: $9,950 * 0.12 = $1,194
Tax on the remaining $11,500 ($21,450 - $9,950): $11,500 * 0.22 = $2,530
Total federal income tax: $1,194 + $2,530 = $3,724
Therefore, Carter should expect to pay $3,724 in federal income tax.