To find out which worker had the lowest taxable income last year, we need to calculate the taxable income for each worker using their gross income, standard deduction, and the number of exemptions.
Here's the step-by-step process:
1. Identify the given data:
- Exemption amount per exemption: \[tex]$3650
- Workers' data:
- Esther:
- Gross income: \$[/tex]45,788
- Standard deduction: \[tex]$5,700
- Exemptions: 2
- Frank:
- Gross income: \$[/tex]47,612
- Standard deduction: \[tex]$8,350
- Exemptions: 2
- Macy:
- Gross income: \$[/tex]41,967
- Standard deduction: \[tex]$5,700
- Exemptions: 1
- Penny:
- Gross income: \$[/tex]52,785
- Standard deduction: \[tex]$8,350
- Exemptions: 3
2. Calculate the total amount for exemptions:
- Esther: 2 exemptions × \$[/tex]3650 = \[tex]$7300
- Frank: 2 exemptions × \$[/tex]3650 = \[tex]$7300
- Macy: 1 exemption × \$[/tex]3650 = \[tex]$3650
- Penny: 3 exemptions × \$[/tex]3650 = \[tex]$10,950
3. Subtract the standard deduction and total exemptions from the gross income to find the taxable income:
- Esther:
\[
\text{Gross Income} - \text{Standard Deduction} - \text{Total Exemptions} = 45,788 - 5,700 - 7,300 = \$[/tex]32,788
\]
- Frank:
[tex]\[
\text{Gross Income} - \text{Standard Deduction} - \text{Total Exemptions} = 47,612 - 8,350 - 7,300 = \$31,962
\][/tex]
- Macy:
[tex]\[
\text{Gross Income} - \text{Standard Deduction} - \text{Total Exemptions} = 41,967 - 5,700 - 3,650 = \$32,617
\][/tex]
- Penny:
[tex]\[
\text{Gross Income} - \text{Standard Deduction} - \text{Total Exemptions} = 52,785 - 8,350 - 10,950 = \$33,485
\][/tex]
4. Compare the taxable incomes:
- Esther: \[tex]$32,788
- Frank: \$[/tex]31,962
- Macy: \[tex]$32,617
- Penny: \$[/tex]33,485
Among these values, the lowest taxable income is \$31,962, which belongs to Frank.
Thus, the worker with the lowest taxable income last year is:
D. Frank
