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AC Motors is a sole proprietorship that has taxable income of $94,200. How much additional tax...

AC Motors is a sole proprietorship that has taxable income of $94,200. How much additional tax will be owed if the taxable income increases by $14,300 based on the following tax rates? Assume this is the sole source of income for the owner. Taxable Income Tax Rate $ 0 − 9,525 10 % 9,526 − 38,700 12 38,701 − 82,500 22 82,501 − 157,500 24 Multiple Choice $3,862 $3,039 $3,432 $3,406 $3,678

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Answer #1

The increment $14,300 taxable income falls under 4th slab of 24%.

Additional Taxes = Taxable Income * Tax Rate = $14,300 * 0.24 = $3,432

So, 3rd option is correct.

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