If the federal government used the progressive tax rate below for individual income tax, calculate the federal income tax owed on a \[tex]$87,300 salary.

\begin{tabular}{|r|c|}
\hline
Standard Deduction & \$[/tex]12,200 \\
\hline
Income Range (\[tex]$) & Progressive Tax Rate \\
\hline
\$[/tex]0 - \[tex]$9,700 & 10\% \\
\hline
\$[/tex]9,701 - \[tex]$39,475 & 12\% \\
\hline
\$[/tex]39,476 - \[tex]$84,200 & 22\% \\
\hline
\$[/tex]84,201 - \[tex]$160,275 & 24\% \\
\hline
\$[/tex]160,276+ & 32\% \\
\hline
\end{tabular}

[tex]\[\operatorname{Tax}=\$[?]\][/tex]



Answer :

#### Step-by-Step Solution:

1. Calculate the taxable income:
- Start with the gross salary: \[tex]$87,300. - Subtract the standard deduction: \$[/tex]12,200.

[tex]\[ \text{Taxable Income} = \$87,300 - \$12,200 = \$75,100 \][/tex]

2. Apply the progressive tax rates to the taxable income:
- The first \[tex]$9,700 is taxed at 10%. - The next \$[/tex]29,775 (\[tex]$39,475 - \$[/tex]9,700) is taxed at 12%.
- The remaining amount up to \[tex]$75,100 between \$[/tex]39,476 and \[tex]$75,100 is taxed at 22%. 3. Breakdown of tax owed in each bracket: - For the first \$[/tex]9,700:

[tex]\[ \$9,700 \times 10\% = \$970 \][/tex]

- For the next \[tex]$29,775: \[ \$[/tex]29,775 \times 12\% = \[tex]$3,573 \] - For the remaining amount up to \$[/tex]75,100:

[tex]\[ (\$75,100 - \$39,475) = \$35,625 \][/tex]

This portion is taxed at 22%:

[tex]\[ \$35,625 \times 22\% = \$7,837.5 \][/tex]

4. Calculate the total tax owed:

Sum up the taxes calculated for each bracket:

[tex]\[ \$970 + \$3,573 + \$7,837.5 = \$12,380.5 \][/tex]

So, the taxable income is \[tex]$75,100, and the federal income tax owed is \$[/tex]12,380.5.