This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Effective tax rate = = = 17.57% Chuck is currently in the 25 percent tax rate bracket. His marginal tax rate on increases in income up to $7,400 and deductions from income up to $41,000 is 25 percent. (35) [LO3] Using the facts in the previous problem, if Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income? What is his marginal rate if, instead, he had $40,000 of additional deductions? If Chuck earns an additional $40,000 of taxable income, his marginal tax rate on the income is 27.45 percent. Marginal Tax Rate = = = 27.45% If Chuck instead had $40,000 of additional tax deductions, his marginal tax rate on the deductions would be 25.00 percent....
View Full Document
- Spring '10