Answer
Tax owed is \[\$26,765.25\].
Work Step by Step
In this case, it is required to compute the tax owed by a single man with a taxable income of \[\$120,000\], the percentage deducted on the first \[\$8,700\] is \[10%\]
\[\begin{align}
& \text{Tax}\ \text{liability}\ \text{on}\ \text{first}\ \$8700=\text{Rate}\times\text{Income}\\&=0.8\times\$8,700\\&=\$870\end{align}\]
\[10%\]and till the next \[\$35,350\] is \[15%\], i.e.,\[35,350-8,700=26,650\]
\[\begin{align}
& \text{Tax}\ \text{liability}\ \text{on}\ \text{the}\ \text{next}\ \$26,650=\text{Rate}\\times\\text{Income}\\&=0.15\times\$26,650\\&=\$3,997.5\end{align}\]
Till the next \[\$71,350\]is \[25%\], i.e.,\[71,350-35,350=36,000\]
\[\begin{align}
& \text{Tax}\ \text{liability}\ \text{on}\ \text{the}\ \text{next}\ \$36,000=\text{Rate}\times\text{Income}\\&=0.25\times\$36,000\\&=\$9000\end{align}\]
Till the next \[\$108,725\]is \[28%\], i.e.,\[108,725-75,950=32,775\]
\[\begin{align}
& \text{Tax}\ \text{liability}\ \text{on}\ \text{the}\ \text{next}\ \$32,775=\text{Rate}\times\text{Income}\\&=0.28\times\$32,775\\&=\$9177\end{align}\]
And the remaining is \[120,000-108,725=11275\]and the tax is \[33%\]:
\[\begin{align}
& \text{Tax}\ \text{liability}\ \text{on}\ \text{the}\ \text{next}\ \$11,275=\text{Rate}\times\text{Income}\\&=0.33\times\$11,275\\&=\$3720.75\end{align}\]
The sum of tax liabilities will be the total tax owed by the person.
\[\begin{align}
& \text{Total}\ \text{Tax}\ \text{owed}=\$870+\$3,997.5+\$9000+\$9177+\$3720.75\\&=\$26,765.25\end{align}\]
