Assignment No. 7 Class: IMSE-211-01 Due Date: 2-26-97 Points: 10 Purpose: To compute income tax liability. 1. You are given the following Internal Revenue Services table used to compute tax liability on yearly earnings: The following table is stored on the network disk under my account under the name assign7.inp. Income Level Base Tax Incremental Tax Rate ($) ($) (%) 500 70 15 1000 145 16 1500 225 17 2000 310 19 4000 690 21 6000 1110 24 8000 1590 25 10000 2090 27 12000 2630 29 14000 3210 31 16000 3830 34 18000 4510 36 20000 5230 38 22000 5990 40 26000 7590 45 32000 10290 50 38000 13290 55 44000 16590 60 50000 20190 62 60000 26390 64 70000 30390 66 80000 32790 68 90000 46190 69 100000 53090 70 2. Example on how to use the above table to compute taxes: Case 1: Income level = $300 Note that the income level is less than $500. Any income level that is less than $500 is taxes at a fixed rate of 14%. Calculation: Base Tax = ($300) * (0.14) = $42.00 Incremental Tax = $0.00 Total Tax = $42.00 + $0.00 = $42.00 Case 2: Income level = $6000 Note that the income is found in the table. Calculation: Base Tax = $1110 Incremental Tax = $0.00 Total Tax = $1110.00 + $0.00 = $1100.00 Case 3: Income level = $1600 Note that the income is found in the table. Calculation: Base Tax = $225 Incremental Tax = ($1600 - $1500) * (0.17) = ($100) * (0.17) = $17.00 Total Tax = $225.00 + $17.00 = $242.00 Case 4: Income level = $100002 Note that the income level is above $100,000. Any income level over $100,000 is taxed at $53,90.00 for base tax for the first $100,000 and 70% incremental tax any amount over $100,000. Calculation: Base Tax = $53090.00 Incremental Tax = ($100002 - $100000) * (0.70) = ($2.00) * (0.70) = $1.40 Total Tax = $5390.00 + $1.40 = $53091.40 3. Summary of results in tabular form: Your Friendly Tax Collection Agency Make It and We Take It --------------------------------------------------------------------------- Income Base Tax Incremental Tax Total Tax ($) ($) ($) ($) --------------------------------------------------------------------------- 300.00 42.00 0.00 42.00 1600.00 225.00 17.00 242.00 6000.00 1110.00 0.00 1110.00 100002.00 53090.00 1.40 53091.40 ---------------------------------------------------------------------------- 4. Write a computer program that takes the following income levels, searches through the IRS tax table and computes the appropriate taxes and produces the table shown above in step 3. Use the following income levels for the programming assignment: $300.00 , $1,600.00 , $6,000.00 , $100002.00 5. You must use the IRS table to compute taxes for incomes that fall inside the table. 6. You must use array(s) to solve this program. 7. Hand in: a. Title page with purpose. b. Pseudo code or a flow chart. c. Output d. Source code.