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
Jerry’s effective rate is 20%. What is his taxable income in 2022, if he paid 100,000625,000$5000
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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