Kathy makes $66,000 annually and pays a net federal income tax rate of 18.85%. How much does she expect to pay in taxes every year?

• A. $10,500
• B. $12,441
• C. $13,200
• D. $14,000

Answer: (B)

To determine how much Kathy expects to pay in taxes annually, we start with her annual income of $66,000 and apply her net federal income tax rate of 18.85%. This calculation involves multiplying her income by the tax rate expressed as a decimal.

First, convert the tax rate from a percentage to a decimal:

18.85% = 0.1885

Next, calculate the tax liability by multiplying her income by the tax rate:

$66,000 * 0.1885 = $12,441

This way, Kathy can expect to pay approximately $12,441 in federal income taxes for the year. This answer accurately reflects the combination of her income and applicable tax rate, demonstrating how tax calculations are typically performed.