Jerry’s effective rate is 20%. What is his taxable income in 2022, if he paid $25,000 in taxes in 2022.Group of answer choices$100,000$125,000$625,000$5000
Question
Solution
The effective tax rate is calculated by dividing the total tax paid by the taxable income. In this case, we know that Jerry's effective tax rate is 20% and he paid $25,000 in taxes.
So, we can set up the equation as follows:
0.20 (Taxable Income) = $25,000
To solve for the taxable income, we divide $25,000 by 0.20:
Taxable Income = 125,000
So, Jerry's taxable income in 2022 was $125,000.
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