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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
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Kudos
$22,500 / 12 months = $1,875 income per month
$1,875 * 8 months of residence = $15,000 of taxable income
$15,000 * .04 tax rate = $600 of state tax paid
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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
Expert Reply
bsahil wrote:
Mr. Hernandez, who was a resident of State X for only 8 months last year, had a taxable income of $22,500 for the year. If the state tax rate were 4 percent of the year’s taxable income prorated for the proportion of the year during which the taxpayer was a resident, what would be the amount of Mr. Hernandez’s State X tax for last year?

(A) $900
(B) $720
(C) $600
(D) $300
(E) $60


Since Mr. Hernadez’s taxable income is prorated for 8 months of the year, his taxable income is:

8/12 x 22,500 = 2/3 x 22,500 = 15,000

Thus, he had to pay 15,000 x 0.04 = 600 dollars in taxes.

Answer: C
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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
The most efficient way to do it I think is as follows:

1) $22,500 * 4 = $90,000
2) move the decimal two places = $90,000 = $900
3) 2/3 * 900 = $600
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Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
Expert Reply
Given

    • Mr. Hernandez was a resident of State X for only 8 months last year.
    • He had a taxable income of $22,500 for the year.

To Find

    • The tax for state X for Mr. Hernandez.

Approach and Working Out

    • Taxable income for 8 months =\(\frac{ 8}{12 }\)× $22,500
      o = $15000

    • Tax = 4 % of $15000
      o = $600

Correct Answer: Option C
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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
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Re: Mr. Hernandez, who was a resident of State X for only 8 [#permalink]
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