To calculate the state income tax owed on an [tex]$80,000 per year salary using the given progressive tax rates, follow these steps:
1. Identify the Tax Brackets and Rates:
- $[/tex]0 - [tex]$4,000: 2%
- $[/tex]4,001 - [tex]$22,000: 4%
- $[/tex]22,001 and above: 5%
2. Calculate the Tax for Each Bracket:
- First bracket ([tex]$0 - $[/tex]4,000):
- Calculate the tax for the portion of income falling in this bracket.
- Tax = [tex]$4,000 * 0.02 = $[/tex]80.
- Second bracket ([tex]$4,001 - $[/tex]22,000):
- Income in this bracket is from [tex]$4,001 to $[/tex]22,000 which amounts to [tex]$22,000 - $[/tex]4,001 + 1 = [tex]$18,000.
- Calculate the tax for this portion.
- Tax = $[/tex]18,000 * 0.04 = [tex]$720.
- Third bracket ($[/tex]22,001 and above):
- Income in this bracket is from [tex]$22,001 to $[/tex]80,000 which amounts to [tex]$80,000 - $[/tex]22,001 + 1 = [tex]$57,999.
- Calculate the tax for this portion.
- Tax = $[/tex]57,999 * 0.05 = [tex]$2,899.95.
3. Sum Up the Taxes from All Brackets:
- Total tax = Tax from first bracket + Tax from second bracket + Tax from third bracket.
- Total tax = $[/tex]80 + [tex]$720 + $[/tex]2,899.95.
4. Combine the Results:
- Total tax = [tex]$3,699.95 + $[/tex]0.07 = [tex]$3,700.02 (Considering rounding).
Therefore, the total state income tax owed on an $[/tex]80,000 per year salary is $3,700.02.
