Future Business Leaders of America (FBLA) Business Calculations Practice Test

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Dive into the FBLA Business Calculations Test. Sharpen your analytical skills with multiple-choice questions and gain insights with detailed explanations. Excel in your exams!

Practice this question and more.

Sam earned $27,500 last year. What is his tax liability based on the provided tax rate schedule?

$3,075.00
$4,125.00
$4,825.00
$4,475.00

The correct answer is: $4,825.00

To determine Sam's tax liability based on his earnings of $27,500, it's crucial to apply the appropriate tax rate as outlined in the tax rate schedule provided. The tax liability is typically calculated using a progressive tax system, where different portions of income are taxed at varying rates. For a taxable income of $27,500, you would typically calculate how much tax is owed at each applicable rate and then sum these amounts. For example, if the first segment of income is taxed at a lower rate, and subsequent portions at higher rates, you'd segment the income accordingly. When applying this method, if the final calculation yields a total tax liability of $4,825, this sum is reached by appropriately applying the respective rates to each tier of income up to $27,500. This thorough calculation includes ensuring that each tax bracket is properly accounted for. Considering this context, the correct answer reflects the application of the tax rates correctly across the income range, leading to the total tax liability being accurately determined at $4,825.