Question

9. What is the average tax rate paid by a single person with a $60,000 adjusted gross income for 2019?

10. A corporation had a net income before taxes of $1.2 million for 2020. Find the tax liability for this company.?

Answer 1

(9) -- What is the average tax rate paid by a single person with a $60000 adjusted gross income for 2019?

Answer -

Step - (1) - Computation of Person's Tax Liability for Tax Year 2019 -

Taxable Income = AGI - Standard Deduction = ($60000 - $12200) = $47800.

	Tax Rate	Taxable Income ($)	Calculation	Amount ($)
I.	10%	0 - 9700	$9700 * 10%	970
II.	12%	9701 - 39475	($39475 - $9700) * 12%	3573
III.	22%	39476 - 84200	($47800 - $39475) * 22%	1832
Tax Liability			I + II + III	6375

.

Step - (2) - Calculation of Person's Average Tax Rate -

Average Tax Rate = Tax Liability / Taxable Income

= $6375 / $60000

= 10.625%

.

(10) -- A corporation had a net income before taxes of $1.2 million for 2020. Find the tax liability for this company?

Answer -

Note - In United states corporate tax rate is flat 21%.

Company's Tax Liability = Net Income before taxes * Corporate tax rate

= $1200000 * 21%

= $252000.