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Mr. Hernandez, who was a resident of State X for only 8

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Mr. Hernandez, who was a resident of State X for only 8 [#permalink]

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New post 02 Aug 2013, 10:29
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Question Stats:

73% (01:11) correct 27% (01:46) wrong based on 60 sessions

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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
[Reveal] Spoiler: OA

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Re: quant income tax [#permalink]

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New post 02 Aug 2013, 11:11
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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


Total tax for the year = 22,500 x 4% = 900
As stated Annual tax is prorated as per the duration of stay.
Prorated Tax = 900 (8/12) = 600
Answer 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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New post 03 Apr 2017, 07:13
Total tax for the 12 months: $22,500 * 4% = $900

6 months of taxes: $450

The prompt asks for the total taxes paid for 8 months. If 6 months of taxes is $450, 8 months would have to be a little bit more than $450. The next value up from $450 is $600.

Answer Choice "C".

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

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New post 24 May 2017, 17:17
$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]

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New post 31 May 2017, 19:02
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] 31 May 2017, 19:02
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