VLOOKUPB32taxtable3 Next put the pointer on D51 get the VLOOKUP menu box and

Vlookupb32taxtable3 next put the pointer on d51 get

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=VLOOKUP(B32,taxtable,3) Next, put the pointer on D51, get the VLOOKUP menu box, and look up the marginal tax rate. The correct value is 35%, and here is the formula: =VLOOKUP(B32,taxtable,4) Next, put the pointer on D52 and look up the marginal tax bracket and then subtract it from the firm's income to find the incremental income. Here is the formula: =B32-VLOOKUP(B32,taxtable,1) Finish by adding the tax on the marginal income to the tax on the bracket base. Taxable Income: $12,000,000 Corporate Tax Rates for 2000 If a corporation's It pays this Plus this percentage taxable income amount on the on the excess is between: base of the bracket over the base (1) (2) (3) (4) $0 $50,000 $0 15.0% $50,000 $75,000 $7,500 25.0% $75,000 $100,000 $13,750 34.0% $100,000 $335,000 $22,250 39.0% $335,000 $10,000,000 $113,900 34.0% $10,000,000 $15,000,000 $3,400,000 35.0% $15,000,000 $18,333,333 $5,150,000 38.0% $18,333,333 and up $6,416,667 35.0% 1st VLOOKUP to find the base amount of tax: $3,400,000 2nd VLOOKUP to find the marginal tax rate: 0.35 3rd VLOOKUP to find the marginal income to be taxed: $2,000,000 $700,000 Total tax liability: $4,100,000
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Individual Tax Table for the 2001 Tax Year If an individual's He/she pays this Plus this percentage Average tax taxable income amount on the on the excess rate at is between: base of the bracket over the base top of bracket (1) (2) (3) (4) (5) $0 $27,050 $0.00 15.0% 15.0% $27,050 $65,550 $4,057.50 27.5% 22.3% $65,550 $136,750 $14,645.00 30.5% 26.6% $136,750 $297,350 $36,361.00 35.5% 31.4% $297,350 and up $93,374.00 39.1% 39.1% Married (Joint Return) Tax Table for the 2001 Tax Year If a couple's It pays this Plus this percentage Average tax taxable income amount on the on the excess rate at is between: base of the bracket over the base top of bracket (1) (2) (3) (4) (5) $0 $45,200 $0.00 15.0% 15.0% $45,200 $109,250 $6,780.00 27.5% 22.3% $109,250 $166,500 $24,393.75 30.5% 25.1% $166,500 $297,350 $41,855.00 35.5% 29.7% $297,350 and up $88,306.75 39.1% 39.1% Other Tax Data: Exemption phase-out begins for: Individuals Married Exemption per person = $2,900 $132,950 $199,450 Capital gains rate (most investments) = 20% Standard deduction (individual) = $4,550 Phase-out begins: $132,950 Standard deduction (married filing joint) = $7,600 Phase-out begins: $132,950 Base on social security (OASDI)= $80,400 Rate on social security (OASDI, payroll)= 6.2% Rate on social security (OASDI, self-employed)= 12.4% Rate on medicare (payroll) = 1.45% Rate on medicare (self-employed) = 2.90% Note: For individuals in 2001 there is actually a tax bracket of 10% for income less than $6000, but the impact of the benefit was accomplished with a tax rebate of $300 for individuals. Note: For married filing joint returns in 2001 there is actually a tax bracket of 10% for income less than $12000, but the impact of the benefit was accomplished with a tax rebate of $600 for married filing joint returns.
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Example Find the tax, the marginal tax rate, and the average tax rate for the following situation. Taxable Income: $35,000 Base taxable income: $27,050.00 Base tax: $4,057.50 Marginal tax rate: 27.5% Tax: $6,243.75 Average tax rate: 17.8% Returns to Investor under Bond and Stock Financing Use Bonds Use Stock (1) (2) Sales $5,000,000 $5,000,000 Operating costs 3,500,000 3,500,000 Earnings before interest and taxes (EBI $1,500,000 $1,500,000 Interest 1,500,000 0 Taxable income $0 $1,500,000 Federal-plus-state taxes (40%) 0 600,000 After-tax income $0 $900,000 Income to investors $1,500,000 $900,000 Rate of return on $10 million of assets 15% 9% Apex Corporation: Calculation of $12 million Loss Carry-Back and Amount Available for Carry-Forward Past Year Past Year Curent Year 2001 2002 2003 Original taxable income $2,000,000 $2,000,000 -$12,000,000 Carry-back credit 2,000,000 2,000,000 Adjusted profit $0 $0 Taxes previously paid (40%) 800,000 800,000 Difference = Tax refund due $800,000 $800,000
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