Intuit Academy Tax Practice Exam

How much income tax would a taxpayer earning $350,000 owe under the government’s tax schedule?

1. $16,500

2. $18,000

3. $20,000

4. $22,500

The correct answer is: $16,500

To determine the income tax owed by a taxpayer earning $350,000 under the government’s tax schedule, one must refer to the applicable tax brackets and rates based on the tax year in question. Given the information about the taxpayer's income, the calculation would involve applying the marginal tax rates to the portions of income that fall within specific tax brackets. Typically, the income tax system in the United States is progressive, meaning higher income levels are taxed at higher rates. For income levels around $350,000, the taxpayer would find themselves in a higher tax bracket, which would significantly influence the total taxes owed. The correct tax calculation would not result in just a flat rate applied to the total income but rather a tiered approach where each portion of income is taxed at the appropriate rate for its bracket. The final tax liability is found by aggregating the tax amounts calculated for each bracket that applies to the income. In this case, if calculating leads to a total tax liability of $16,500, that figure appropriately reflects the total due based on the bracketed calculation. The other choices presented may reflect misunderstandings about the tax brackets or incorrect calculations based on either flat rates or misapplied rates. Understanding how marginal tax rates work and the significance of