Done HW4 system will cost 40000 and have an average annual d

Done HW4 system will cost $40,000 and have an average annual depreciation of $8000. The equipment will increase gross income by an estimated $9000 and expenses by $2000 year. Compute the expected change in income taxes for the year if the new purchased MSE 352 Production Cost Analysis Sunmer 2017-2018, Dr. Fawaz Abdulmalek 7. Mariam has recntly been promoted, and suspects that he is now in a higher tax bracket. If his new financial data are: $400,000 $250 $75,000 Annual Salary Monthly benefits from bank account Annual expenses Calculate the following a. b. c. Taxable income for the year Federal tax for Mariam (use table provided in class notes) Net income

Solution

a) Taxable income for the year = Annual salary + Monthly benefits from bank account

Taxable income for the year = $ 400,000 + $ 250 * 12

Taxable income for the year = $ 403,000

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b) The federal tax for Mariam is calculated using the tax rate for the corresponding wage bracket from the table.

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C) Net Income = Taxable income for the year - taxes paid