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Question 1206192: Tara is saving for an overseas trip. Her taxable income is usually about $20000 . She estimates that
she will need $5000 for the trip, so she is going to do some extra work to raise the money. How
much extra will she need to earn in order to have $5000 after tax?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! this depends on what the tax rate is.
the federal tax rate for someone with taxable income of 20,000 is equal to
hee's a federal tax rate schedule for 2023.
https://www.nerdwallet.com/article/taxes/federal-income-tax-brackets#:~:text=There%20are%20seven%20federal%20income%20tax%20rates%20and%20brackets%20in,you'll%20owe%20that%20year.
i think it works this way.
assuming she is single, and makes 20,000 a year, then her tax rate is 10% for the first 11000 and then 12% for any amount over 11000 up to 44725.
the additional 5000 she needs is in the 12% tax bracket, since she is making more than 11000 and less than or equal to 44725.
to determine how much she needs to earn before taxes so that she can clear 5000 after taxes, use the following formula.
5000 = x - .12 * x, what x is the taxable income required.
you will get 5000 = .88 * x
solve for x to get x = 5000 / .88 = 5681.82.
she would need to earn 5681.82 before taxes so that she can clear 5000 after taxes.
tax on 5681.82 = .12 * that = 681.82.
subtract that from 5681.82 and she has 5000 after taxes have been paid.
this analysis only involves federal taxes.
there are also state taxes and local taxes that have to be paid, if any.
a complete analysis would need to take all of these into account.
once you know the total of all tax rates that have to be paid on the additional income, then the same formula applies.
let me know if you have any questions.
theo
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