Let's break down the tax calculation step-by-step using the provided tax brackets and taxable income of [tex]$64,000:
1. Calculate the tax for the first bracket ($[/tex]0 to [tex]$9,875) at 10%:
- Tax = \(10\% \times \$[/tex]9,875\)
- Tax = [tex]\(0.10 \times 9,875 = \$987.50\)[/tex]
2. Calculate the tax for the second bracket ([tex]$9,876 to $[/tex]40,125) at 12%:
- The amount of income in this bracket is [tex]\(\$40,125 - \$9,875\)[/tex].
- Tax = [tex]\(12\% \times (\$40,125 - \$9,875)\)[/tex]
- Tax = [tex]\(0.12 \times 30,250 = \$3,630.00\)[/tex]
3. Calculate the tax for the third bracket ([tex]$40,126 to $[/tex]85,525, but we only go up to [tex]$64,000) at 22%:
- The amount of income in this bracket is \(\$[/tex]64,000 - \[tex]$40,125\).
- Tax = \(22\% \times (\$[/tex]64,000 - \[tex]$40,125)\)
- Tax = \(0.22 \times 23,875 = \$[/tex]5,252.50\)
4. Sum up the taxes from all brackets:
- Total Tax = [tex]\(\$987.50 + \$3,630.00 + \$5,252.50 = \$9,870.00\)[/tex]
Thus, the correct answer for the tax payable on a taxable income of [tex]$64,000 is calculated using option A:
A. $[/tex]10 \% \times \[tex]$ 9,875+12 \% \times(\$[/tex] 40,125-\[tex]$ 9,875)+22 \% \times(\$[/tex] 64,000-\[tex]$ 40,125)$[/tex]
