Walter accepted a new job with an annual salary of $120,000. How much can he expect to earn after paying income taxes?

Question

Annual Income (Wages)    Income Tax Rate

$0 to $9,075                  10%

$9,076 to $36,900             15%

$36,901 to $89,350             25%

$89,351 to $186,350            28%

$186,351 to $405,100           33%

$405,101 to $406,750            35%

Over $406,750                  39.6%

Walter accepted a new job with an annual salary of $120,000. How much can he expect to earn after paying income taxes?

A $108,000

B $102,000

C $90,000

D $86,400

Answer 1

If you look in the table, $120,000 falls in the range of $89,351 to $186,350, which means it is taxed at a rate of 28%.

Taxes: $120000 * 28% = $120000 * 0.28 = $33600

Leftover Earnings: $120000 - $33600 = $86400.