1. Graduated State Income Tax pp. 122-123 2-3 SECTION

2. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 2-3, Slide 2 of 16 2-3 graduated income tax (p. 122) An income tax in which the tax rate increases at different levels of income. Key Words to Know

3. Click to edit Master text styles Second level Third level Fourth level Fifth level 3 Click to edit Master text styles Second level Third level Fourth level Fifth level 3 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 2-3, Slide 3 of 16 2-3 Tax Withheld per Pay Period = Annual Tax Withheld Number of Pay Periods per Year Formula

4. Click to edit Master text styles Second level Third level Fourth level Fifth level 4 Click to edit Master text styles Second level Third level Fourth level Fifth level 4 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 2-3, Slide 4 of 16 2-3 San Mateo’s annual salary is $34,500. She is paid semi-monthly. Her personal exemptions total $1,500. How much does her employer deduct from each of Mateo’s semi-monthly paychecks for state income tax? Example 1

5. Click to edit Master text styles Second level Third level Fourth level Fifth level 5 Click to edit Master text styles Second level Third level Fourth level Fifth level 5 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 2-3, Slide 5 of 16 2-3 Figure 2.2

6. Click to edit Master text styles Second level Third level Fourth level Fifth level 6 Click to edit Master text styles Second level Third level Fourth level Fifth level 6 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 2-3, Slide 6 of 16 2-3 Find the taxable wages. Annual Gross Pay – Personal Exemptions $34,500.00 – $1,500.00 = $33,000.00 Example 1 Answer: Step 1

7. Click to edit Master text styles Second level Third level Fourth level Fifth level 7 Click to edit Master text styles Second level Third level Fourth level Fifth level 7 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 2-3, Slide 7 of 16 2-3 Find the annual tax withheld. 1. 1.First $1,000: 1.5% of $ 1,000.00 = $ 15.00 2. 2.Next $2,000: 3.0% of $ 2,000.00 = 60.00 3. 3.Next $2,000: 4.5% of $ 2,000.00 = 90.00 4. 4.Over $5,000: 5.0% of ($33,000.00 – $5,000.00) 5.0% of $28,000.00 = 1,400.00 Total $1,565.00 Example 1 Answer: Step 2

8. Click to edit Master text styles Second level Third level Fourth level Fifth level 8 Click to edit Master text styles Second level Third level Fourth level Fifth level 8 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 2-3, Slide 8 of 16 2-3 Find the tax withheld per pay period. Annual Tax Withheld ÷ Number of Pay Periods per Year $1,565.00 ÷ 24 = $65.208 or $65.21 Example 1 Answer: Step 3

9. Click to edit Master text styles Second level Third level Fourth level Fifth level 9 Click to edit Master text styles Second level Third level Fourth level Fifth level 9 SECTION Copyright © Glencoe/McGraw-Hill MBA, Section 2-3, Slide 9 of 16 2-3 Graduated State Income Tax 2-3 END OF SECTION Homework Pg. 123: 1-13