Let's break down the solution to find the taxable income, the highest tax bracket Jeff's income falls into, and the total taxes owed.
### Step 1: Determine the Taxable Income
Jeff's income is given as [tex]$97,720. For simplicity, we're assuming that this is also his taxable income.
Taxable Income: $[/tex]97,720
### Step 2: Identify the Tax Brackets
In 2023 for a single filer, the tax brackets are:
- 10% on income up to [tex]$10,275
- 12% on income over $[/tex]10,275 and up to [tex]$41,775
- 22% on income over $[/tex]41,775 and up to [tex]$89,075
- 24% on income over $[/tex]89,075 and up to [tex]$170,050
- 32% on income over $[/tex]170,050 and up to [tex]$215,950
- 35% on income over $[/tex]215,950 and up to [tex]$539,900
- 37% on income over $[/tex]539,900
### Step 3: Find Jeff's Highest Tax Bracket
Jeff's taxable income of [tex]$97,720 places him within the following tax brackets:
- 10% on the first $[/tex]10,275
- 12% on the amount between [tex]$10,275 and $[/tex]41,775
- 22% on the amount between [tex]$41,775 and $[/tex]89,075
- 24% on the amount over [tex]$89,075 up to $[/tex]97,720
Thus, the highest tax bracket Jeff's income reaches is the 24% bracket.
Highest Tax Bracket: 24%
### Step 4: Calculate the Total Taxes Owed
Let's calculate the taxes for each segment of Jeff's income:
1. 10% Bracket:
[tex]\[ 10,275 \times 0.10 = 1,027.50 \][/tex]
2. 12% Bracket:
[tex]\[ (41,775 - 10,275) \times 0.12 = 31,500 \times 0.12 = 3,780.00 \][/tex]
3. 22% Bracket:
[tex]\[ (89,075 - 41,775) \times 0.22 = 47,300 \times 0.22 = 10,406.00 \][/tex]
4. 24% Bracket:
[tex]\[ (97,720 - 89,075) \times 0.24 = 8,645 \times 0.24 = 2,074.80 \][/tex]
Summing these amounts gives the total tax:
[tex]\[ 1,027.50 + 3,780.00 + 10,406.00 + 2,074.80 = 17,288.30 \][/tex]
Total Taxes Owed: [tex]$17,288.30
To summarize:
1. Jeff's taxable income is $[/tex]97,720.
2. The highest tax bracket Jeff's income falls into is 24%.
3. The total taxes owed by Jeff are $17,288.30.
