Income Tax Brackets

A raise never leaves you worse off.

12 problems · about 22 minutes · TEKS M.M.6.B

NameDate

Figure — use these to answer the problems

Tax paid in each bracket. Only the slice inside a bracket is charged at that rate.

10% band1000

20% band3000

30% band1500

Tax in the 10 percent band1000

Tax in the 20 percent band3000

Tax in the 30 percent band1500

Figure 1

Straightforward practice. Get the method working first.

5 problems

Tax $3000 on income $30000. Effective rate in percent?
Answer
2
What happens when you move into a higher tax bracket?
- Only the income above the threshold is taxed at the higher rate.
- All your income is taxed at the higher rate.
20% on $20000 of income. Tax in dollars?
Answer
Bands of $1000 and $4000 tax. Total tax in dollars?
Answer
Tax $4000 on income $40000. Effective rate in percent?
Answer

The same ideas with more to keep track of.

3 problems

Income $25000 with 10% on the first 10000 and 20% above. Total tax in dollars?
Answer
Can a raise reduce your take-home pay? 1 yes, 0 no.
Answer
Which is worth more per dollar? 1 a deduction, 2 a credit.
Answer

Mixed problems. Work out what kind of question it is before you start.

4 problems

9
Match each term with its meaning.
Draw a line from each item on the left to its match on the right.
- Marginal rate
- Effective rate
- Credit
- The rate on your next dollar earned
- Total tax divided by total income
- A reduction of the tax itself
Tax $9000 on income $60000. Effective rate in percent?
Answer
The First Band
10% on the first $10000. Tax on that band, in dollars?
Answerdollars
The Effective Rate
Tax $5000 on income $30000. Effective rate in percent, to one decimal place?
Answer%