To calculate the federal income tax owed on a [tex]$74,300 salary, we'll follow the progressive tax rate schedule provided, applying each tax rate to the appropriate portion of the taxable income. Here’s the step-by-step breakdown:
1. Calculate the Taxable Income:
Income: $[/tex]74,300
Standard Deduction: [tex]$12,200
\[
\text{Taxable Income} = 74,300 - 12,200 = 62,100
\]
2. Apply the Tax Rates in the Progressive Tax Brackets:
First Bracket (0 - $[/tex]9,700):
[tex]\[
\text{Income in this bracket} = 9,700
\][/tex]
[tex]\[
\text{Tax in this bracket} = 9,700 \times 0.10 = 970
\][/tex]
Remaining Taxable Income:
[tex]\[
62,100 - 9,700 = 52,400
\][/tex]
Second Bracket ([tex]$9,701 - $[/tex]39,475):
[tex]\[
\text{Income in this bracket} = 39,475 - 9,700 = 29,775
\][/tex]
[tex]\[
\text{Tax in this bracket} = 29,775 \times 0.12 = 3,573
\][/tex]
Remaining Taxable Income:
[tex]\[
52,400 - 29,775 = 22,625
\][/tex]
Third Bracket ([tex]$39,476 - $[/tex]84,200):
Remaining taxable income falls into this bracket entirely:
[tex]\[
\text{Income in this bracket} = 22,625
\][/tex]
[tex]\[
\text{Tax in this bracket} = 22,625 \times 0.22 = 4,977.5
\][/tex]
Summing Up the Taxes:
[tex]\[
\text{Total Tax} = 970 + 3,573 + 4,977.5 = 9,520.5
\][/tex]
Therefore, the federal income tax owed on a [tex]$74,300 salary is \(\$[/tex] 9,520.5\).
