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Calculate Federal Income Tax Answers and Explanations

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The average American wants to share as little of his or her earnings with Uncle Sam. How does the saying go? Don’t tax you. Don’t tax me. Tax that man behind the tree. Gnawing on a worker’s wages, income tax is an everyday example of percent decrease at work.  This article focuses on using percents to calculate disposable income, the amount of money that remains after paying federal income tax.

How to Calculate Income Tax

When you get that first real job and learn that you’ll have an annual salary of $36,000, realize that you don’t have $3,000 a month to spend.

Let’s say that your income tax rate will be 5%. What will be your disposable income?

1. Find the amount of taxes that you’ll pay.
36,000 * .05 = $1,800

2. Subtract the amount of taxes from your income.
$36,000 – $1,800 = $34,200

Disposable Income:  $34,200
Disposable Income per Month: $34,200/12 = $2,850
    
Don’t run out and get a mortgage and car note that total $2,500 a month. Otherwise, you will be the hungriest person living the American Dream.

Answers and Explanations

Original Worksheet

Use each annual salary and tax rate to calculate disposable income.

1. Annual salary: $350,000
Federal income tax rate:  28%
Disposable income: $252,000

Find the amount of taxes that you’ll pay.
$350,000 * .28 = $98,000

Subtract the amount of taxes from your income.
$350,000 - $98,000= $252,000


2. Annual salary:  $10,000
Federal income tax rate: 5%
Disposable income: $9,500

Find the amount of taxes that you’ll pay.
$10,000 * .05 = $500

Subtract the amount of taxes from your income.
$10,000 - $500= $9,500


3. Annual salary:  $80,500
Federal income tax rate:  10%
Disposable income: $72,450

Find the amount of taxes that you’ll pay.
$80,500 * .10 = $8,050

Subtract the amount of taxes from your income.
$80,500 - $8,050= $72,450


4. Annual salary: $175,000
Federal income tax rate: 23%
Disposable income:  $134,750

Find the amount of taxes that you’ll pay.
$175,000 * .23 = $40,250

Subtract the amount of taxes from your income.
$175,000 - $40,250= $134,750


5. Annual salary: $50,400
Federal income tax rate:  10%
Disposable income: $45,360

Find the amount of taxes that you’ll pay.
$50,400 * .10 = $5,040

Subtract the amount of taxes from your income.
$50,400 - $5,040 = $45,360


6. Annual salary: $93,550
Federal income tax rate:  18%
Disposable income: $76,711

Find the amount of taxes that you’ll pay.
$93,550 * .18  = $16,839

Subtract the amount of taxes from your income.
$93,550 - $16,839 = $76,711


7. Annual salary:  $27,950
Federal income tax rate:  5%
Disposable income: $26,552.50

Find the amount of taxes that you’ll pay.
$27,950 * .05  = $1,397.50

Subtract the amount of taxes from your income.
$27,950 - $1,397.50 = $26,552.50

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