Intuit Academy Tax Practice Exam

What is the total income tax calculated for a taxpayer earning $350,000 considering the specific tax law?

1. $30,000

2. $32,000

3. $28,000

4. $25,000

The correct answer is: $30,000

To determine the correct total income tax for a taxpayer earning $350,000 under the specific tax law, it is essential to understand current tax brackets and applicable rates. For an income of $350,000, the calculation involves applying the tax rates according to the respective brackets that pertain to that income level. In the context of tax law, the income is typically taxed progressively, meaning that different portions of the income are subject to different tax rates. For instance, certain amounts fall under lower tax rates, while higher portions may be taxed at higher rates. When calculating taxes, the first portion of income is taxed at the lowest rates, and subsequent portions are taxed in accordance with the applicable tax brackets. In this scenario, the choice identified as correct indicates a calculated total income tax of $30,000, which suggests that the taxpayer effectively fell into a certain bracket or brackets upon which the total amount was computed. This could be consistent with certain tax policies, exemptions, deductions, or credits that apply specifically to high earners but do not negate the overall tax incurred. This understanding of the progressive tax system and how income tax is built upon various levels aids in grasping why the total income tax arises to $30,000 for someone earning $350,