Calculating Maria's Federal Income Taxes

C

As Maria's income increases from $20,000 per year to $40,000 per year, her federal income tax liability will also increase. This is because the U.S. federal income tax system is a progressive tax system, which means that as a person's income increases, they move into higher tax brackets and pay a higher percentage of their income in taxes.

To determine how much federal income tax Maria will owe in her new job, we need to know her filing status (single, married filing jointly, etc.), deductions, and any credits she may be eligible for. For the purposes of this question, let's assume she is single with no dependents and takes the standard deduction.

Using the tax tables provided by the Internal Revenue Service (IRS), we can calculate Maria's federal income tax liability for the 2023 tax year, which is when this question was written. If Maria earns $40,000 per year and takes the standard deduction, her taxable income will be $30,550.

According to the IRS tax tables for the 2023 tax year, a single person with taxable income of $30,550 will owe $4,223.75 plus 22% of the amount over $14,200 (which is the upper limit of the 12% tax bracket for single filers).

So, Maria's federal income tax liability in her new job will be:

$4,223.75 + 22% of ($30,550 - $14,200) = $6,338.75

Now, let's compare this to how much Maria would have paid in federal income taxes when she was earning $20,000 per year. Using the same assumptions as before (single with no dependents and taking the standard deduction), Maria's taxable income would have been $9,950.

According to the IRS tax tables for the 2023 tax year, a single person with taxable income of $9,950 will owe $995 plus 12% of the amount over $9,700.

So, Maria's federal income tax liability when she was earning $20,000 per year would have been:

$995 + 12% of ($20,000 - $9,700) = $1,555

Therefore, Maria's federal income tax liability will increase from $1,555 when she was earning $20,000 per year to $6,338.75 in her new job earning $40,000 per year.

In conclusion, the correct answer to this question is C. Double, at least, from when she was in college.