Patty Kim earns $20,000 per year. She is paid 26 times per year and claims 1 exemption. If $17.31 is withheld from each paycheck, at what rate is she taxed?
20,000/26 = 769.23
17.31/769.23 = 0.0225 = 2.225%
2.3%
To determine at what tax rate Patty Kim is being taxed, we need to calculate her annual tax liability and then divide it by her annual income.
First, let's calculate Patty Kim's annual tax liability.
Step 1: Calculate the total amount withheld from each paycheck:
$17.31 withheld per paycheck x 26 paychecks = $450.06 withheld per year
Step 2: Calculate Patty Kim's taxable income after exemptions:
$20,000 per year - $4,550 (for one exemption) = $15,450
Step 3: Calculate the annual tax liability:
Use the tax brackets or tax table to determine the tax rate based on her taxable income.
Since the specific tax brackets or rates are not provided in the question, I will use the example federal tax rates for 2021. Remember that the actual tax rates may vary depending on the specific tax regulations and deductions available.
For example, let's assume that Patty Kim falls into the 15% tax bracket for her taxable income of $15,450.
15% of $15,450 = $2,317.50
So, Patty Kim's annual tax liability is $2,317.50.
Finally, let's calculate the tax rate:
$2,317.50 (annual tax liability) / $20,000 (annual income) = 0.1158
Multiply the result by 100 to get the tax rate as a percentage:
0.1158 x 100 = 11.58%
Therefore, Patty Kim is being taxed at approximately 11.58%. Again, please note that this is an example calculation using standard tax brackets, and the tax rates can vary depending on the actual tax regulations in place.