If Agnes paid $15,449.60 in federal income tax at a rate of 28.4%, what is the amount of state income tax she paid if it's 3.75% of her federal taxable income?

• A. $1,800.00
• B. $2,040.00
• C. $2,500.00
• D. $3,200.00

Answer: (B)

To determine the state income tax amount Agnes paid based on the federal income tax and her tax rate, we first need to find her federal taxable income. The federal income tax she paid is $15,449.60, and her tax rate is 28.4%.

To find her federal taxable income, we use the formula:

Federal Tax = Federal Taxable Income × Tax Rate.

Rearranging the formula gives:

Federal Taxable Income = Federal Tax / Tax Rate.

Substituting the known values gives:

Federal Taxable Income = $15,449.60 / 0.284.

Calculating this results in a federal taxable income of approximately $54,400.

Now that we have her federal taxable income, we can calculate the state income tax. The state income tax rate is 3.75%, so we use the following formula:

State Income Tax = Federal Taxable Income × State Tax Rate

State Income Tax = $54,400 × 0.0375.

Calculating this yields a state income tax of $2,040.

This confirms that the amount of state income tax Agnes paid is indeed $2,040. Recognizing that this value aligns with the chosen answer, it indicates a solid grasp on