Question

Lisa made $15,000 in taxable income last year.
Suppose the income tax rate is 10% for the first $8500 plus 15% for the amount over $8500.
How much must Lisa pay in income tax for last year?

Answer 1

To calculate Lisa's income tax, we first determine the tax on the first $8500 of her income and then calculate the tax on the remaining amount.

1. Tax on the first $8500:
$8500 * 10% = $850

2. Tax on the amount over $8500:
($15000 - $8500) * 15% = $6500 * 15% = $975

3. Total tax:
$850 + $975 = $1825

Therefore, Lisa must pay $1825 in income tax for last year. Hoped this helped.