Dominic earned $32,000 in taxable income last year; this year, it is expected to be $43,000 .
Question:
Dominic earned $32,000 in taxable income last year; this year, it is expected to be $43,000 . Last year, the basic tax brackets in his country were as follows: a single person owed 9% of all taxable income from $0 to $9,400 ; 13% of all income from $9,401 to $41,000 ; and 23% of all taxable income from $41,001 to $84,000 . The income levels of the tax brackets are indexed to rise automatically with inflation (they simply increase by the rate equal to the previous year’s inflation rate).
Determine the income tax that Dominic owes this year if inflation reached 7%7% last year. Enter your answer as a positive number in the box below and round to two decimal places.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill