This year, you owed $6,414.95 in federal income tax. If you are taxed at a net rate of 17%, what was your taxable income for this year? a. $109,054 b. $26,792 c. $44,867 d. $37,735

The solution to the problem is shown below:

Federal Income Tax = $ 6,414.95

Net rate = 17%

Taxable income = ?

We have to use the formula below in solving the taxable income:

Federal Tax Income = Taxable Income x Net Rate

$ 6,414.95 = Taxable Income * 0.17

Taxable Income = $6,414.95/0.17

Taxable Income = $ 37,735

The answer is letter "D".