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Job A pays an annual salary of [tex]\$90,600[/tex], while job B pays [tex]\$93,900[/tex]. The taxpayer choosing between the two jobs files his federal income tax return with a standard deduction of [tex]\$5,700[/tex], only himself as an exemption for [tex]\$3,650[/tex], and no additional adjustments to income. After taxes, what is the difference in pay between the two jobs? Use the table below as a guide.

\begin{tabular}{|r|r|r|r|r|}
\hline \multicolumn{5}{|c|}{Single} \\
\hline \begin{tabular}{r}
Taxable \\
income is \\
over
\end{tabular} & \begin{tabular}{r}
But not \\
over
\end{tabular} & \multicolumn{1}{|c|}{The tax is} & \multicolumn{1}{|c|}{Plus} & \begin{tabular}{c}
Of the \\
amount \\
over
\end{tabular} \\
\hline 0 & 8,350 & 0.00 & [tex]$10\%$[/tex] & 0 \\
\hline 8,350 & 33,950 & 835.00 & [tex]$15\%$[/tex] & 8,350 \\
\hline 33,950 & 82,250 & [tex]$4,675.00$[/tex] & [tex]$25\%$[/tex] & 33,950 \\
\hline 82,250 & 171,550 & [tex]$16,750.00$[/tex] & [tex]$28\%$[/tex] & 82,250 \\
\hline 171,550 & 372,950 & [tex]$41,754.00$[/tex] & [tex]$33\%$[/tex] & 171,550 \\
\hline 372,950 & & [tex]$108,216.00$[/tex] & [tex]$35\%$[/tex] & 372,950 \\
\hline
\end{tabular}

A. [tex]\$924[/tex]
B. [tex]\$825[/tex]
C. [tex]\$2,406[/tex]
D. [tex]\$3,300[/tex]


Sagot :

To determine the difference in pay between the two jobs after accounting for federal income taxes, we start by calculating the taxable income for both Job A and Job B.

### 1. Taxable Income Calculation:
Each job has a standard deduction of \[tex]$5700 and a single exemption of \$[/tex]3650.

For Job A:
[tex]\[ \text{Taxable Income A} = \text{Salary A} - \text{Standard Deduction} - \text{Exemption} = 90600 - 5700 - 3650 = 81250 \][/tex]

For Job B:
[tex]\[ \text{Taxable Income B} = \text{Salary B} - \text{Standard Deduction} - \text{Exemption} = 93900 - 5700 - 3650 = 84550 \][/tex]

### 2. Tax Calculation:

Using the tax brackets provided, we need to compute the tax for each level of income incrementally.

For Job A (Taxable Income: \[tex]$81250): 1. Up to \$[/tex]8350:
[tex]\[ 8350 \times 0.10 = 835.00 \][/tex]
2. From \[tex]$8350 to \$[/tex]33950 (difference: \[tex]$25600): \[ 25600 \times 0.15 = 3840.00 \] 3. From \$[/tex]33950 to \[tex]$82250: but only up to \$[/tex]81250 (difference: \[tex]$47300): \[ 47300 \times 0.25 = 11825.00 \] Summing these up: \[ 835.00 + 3840.00 + 11825.00 = 16500.00 \] For Job B (Taxable Income: \$[/tex]84550):
1. Up to \[tex]$8350: \[ 8350 \times 0.10 = 835.00 \] 2. From \$[/tex]8350 to \[tex]$33950 (difference: \$[/tex]25600):
[tex]\[ 25600 \times 0.15 = 3840.00 \][/tex]
3. From \[tex]$33950 to \$[/tex]82250 (difference: \[tex]$48300): \[ 48300 \times 0.25 = 12075.00 \] 4. From \$[/tex]82250 to \[tex]$84550 (difference: \$[/tex]2300):
[tex]\[ 2300 \times 0.28 = 644.00 \][/tex]

Summing these up:
[tex]\[ 835.00 + 3840.00 + 12075.00 + 644.00 = 17394.00 \][/tex]

### 3. Post-Tax Incomes:
For Job A:
[tex]\[ \text{Post-Tax Income A} = \text{Salary A} - \text{Tax A} = 90600 - 16500 = 74100 \][/tex]

For Job B:
[tex]\[ \text{Post-Tax Income B} = \text{Salary B} - \text{Tax B} = 93900 - 17394 = 76506 \][/tex]

### 4. Difference in Pay After Taxes:
[tex]\[ \text{Difference in Pay} = \text{Post-Tax Income B} - \text{Post-Tax Income A} = 76506 - 74100 = 2406.00 \][/tex]

Therefore, the difference in pay between the two jobs after taxes is:
[tex]\[ \boxed{2406} \][/tex]