Let's break down the problem step by step to determine Monica's tax bracket for last year.
1. Calculating Monica's Taxable Income:
- Gross Income: Monica's total income for the year was \$14,000.
- Standard Deduction: The amount that can be deducted from her income to reduce the taxable income is \$5,700.
- Exemption: Monica can claim an exemption for herself, which is \$3,650.
To find the taxable income, we subtract both the standard deduction and the exemption from the gross income:
[tex]\[
\text{Taxable Income} = \text{Gross Income} - \text{Standard Deduction} - \text{Exemption}
\][/tex]
[tex]\[
\text{Taxable Income} = \[tex]$14,000 - \$[/tex]5,700 - \[tex]$3,650 = \$[/tex]4,650
\][/tex]
2. Determining the Tax Bracket:
Now we need to use the given tax bracket table to determine where Monica's taxable income of \$4,650 falls.
[tex]\[
\begin{tabular}{|c|c|c|}
\hline
\multicolumn{3}{|c|}{\textbf{Single}} \\
\hline \textbf{Taxable income is over} & \textbf{But not over} & \textbf{Bracket} \\
\hline
\[tex]$0 & \$[/tex]8,350 & 10\% \\
\hline
\[tex]$8,350 & \$[/tex]33,950 & 15\% \\
\hline
\[tex]$33,950 & \$[/tex]82,250 & 25\% \\
\hline
\[tex]$82,250 & \$[/tex]171,550 & 28\% \\
\hline
\[tex]$171,550 & \$[/tex]372,950 & 33\% \\
\hline
\$372,950 & & 35\% \\
\hline
\end{tabular}
\][/tex]
According to the table, any taxable income that falls between \[tex]$0 and \$[/tex]8,350 falls into the 10\% tax bracket.
3. Conclusion:
Since Monica's taxable income of \[tex]$4,650 falls within the range of \$[/tex]0 to \$8,350, she falls into the 10\% tax bracket.
Therefore, Monica's tax bracket based on her income and deductions is 10%.
