00:01
Hello, welcome to this lesson.
00:02
In this lesson, we have tax payer together with the gross income, the deductions, the taxable income, and the tax will fill in the table, right? so, the first column that will fill, we are looking at the taxable income.
00:19
Now, the taxable income is the gross income minus deductions.
00:24
So, for example, for taxpayer a, the gross income was $20 ,000 and there's a deduction of $4 ,000, right? so, that makes the taxable income $16 ,000.
00:43
So, what we'll do is that we'll look at what tax percentage bracket do we have $16 ,000 from the table, the table 19 .1, right? so looking at $16 ,000, it is between the second bracket, that is $7 ,876 to $40 ,125.
01:10
So that makes it 12 % of their taxable income.
01:14
So we have $16 ,000 times 0 .12.
01:19
And that makes the test they would have to pay as one and one thousand nine hundred and twenty dollars all right now let's go to the second part where we have a gross income of forty thousand to forty thousand we have deductions of sixteen thousand so let's subtract that from it so that we get the testable income that month that we can tax and what this we have 24 000 so 24 000 is still within the second bracket that is from nine thousand eight hundred and seventy six to forty thousand one hundred and twenty five so twenty four thousand we multiply by twelve percent and we have 2 ,880.
02:20
All right.
02:21
Now let's go to the second, the third part, where this time we have a deduction of 80 ,000, a gross income of 80 ,000, deduction of 34 ,000, and that makes a taxable income of 46 ,000.
02:40
So 46 ,000 is in the third bracket...