pg12 - Average Tax Rate = = = 20.16 Jorge and Anita’s...

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Marginal Tax Rate = = = 35.00% If Campbell instead had $15,000 of additional tax deductions, her marginal tax rate on the deductions would be 35.00 percent. Marginal Tax Rate = = = 35.00% (39) [LO3] Jorge and Anita, married taxpayers, earn $150,000 in taxable income and $40,000 in interest from an investment in City of Heflin bonds. Using the U.S. tax rate schedule for married filing jointly, how much federal tax will they owe? What is their average tax rate? What is their effective tax rate? What is their current marginal tax rate? Jorge and Anita will owe $30,243.50 in federal income tax this year computed as follows: $30,243.50 = $26,687.50 + 28%($150,000 - $137,300)). Jorge and Anita’s average tax rate is 20.16 percent.
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Unformatted text preview: Average Tax Rate = = = 20.16% Jorge and Anita’s effective tax rate is 15.92 percent. Effective tax rate = = = 15.92% Jorge and Anita are currently in the 28 percent tax rate bracket. Their marginal tax rate on increases in income up to $59,250 and deductions up to $12,700 is 28 percent. (40) [LO3] Using the facts in the previous problem, if Jorge and Anita earn an additional $100,000 of taxable income, what is their marginal tax rate on this income? What is their marginal rate if, instead, they reported an additional $100,000 in deductions? If Jorge and Anita earn an additional $100,000 of taxable income, their marginal tax rate on the income is 30.04 percent....
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