Question

This table shows the 2014 Federal income tax brackets for single taxpayers.



Phung works as a pharmacist in Tampa, Florida. Her income is $116,200 a year.

Which statements about Phung’s income and tax situation are correct? Check all that apply.

Phung will pay 28% of her total income in state taxes.
The first $9,075 she makes each year will be taxed at 10%.
Portions of Phung’s income will be taxed at 10%, 15%, 25%, and 28%.
Phung will pay 28% of her total income in federal taxes.
After $36,000, Phung’s taxable income will experience the greatest tax bracket increase.

Answer 1

Correct:
- The first $9,075 she makes each year will be taxed at 10%.
- Portions of Phung’s income will be taxed at 10%, 15%, 25%, and 28%.
- After $36,000, Phung’s taxable income will experience the greatest tax bracket increase.

Incorrect:
- Phung will pay 28% of her total income in state taxes. (Florida has no state income tax.)
- Phung will pay 28% of her total income in federal taxes. (28% is her marginal rate; only the portion of income in that bracket is taxed at 28%, so her overall effective federal tax rate is lower.)