Question

EXCEL MASTER IT! PROBLEM Using Excel to find the marginal tax rate can be accomplished using the VLOOKUP func- tion. However, calculating the total tax bill is a little more difficult. Below we have shown a copy of the IRS tax table for an unmarried individual for 2018. Often, tax tables are presented in this format. xlsx If taxable income is But not over . $ 9,525 38,700 93,700 195,450 424,950 426,700 The tax is: over... 0 9,526 38,701 93,701 195,451 424,951 426,701 10% of the amount over $0 $952.50 plus 15% of the amount over $9,525 5,328.75 plus 25% of the amount over $38,700 $19,078.75 plus 28% of the amount over $93,700 $47,568.75 plus 33% of the amount over $195,450 $123,303.75 plus 35% of the amount over $424,950 $1 23.9 16.25 plus 39.6% of the amount over $426,700 In reading this table, the marginal tax rate for taxable income less than $9,525 is 10 percent. If the taxable income is between $9.525 and $38,700, the tax bill is $952.50 plus the marginal taxes. The marginal taxes are calculated as the taxable income minus $9.525 times the marginal tax rate of 15 percent.

Please answer in excel.

Please show the formulas

Answer 1

Answer:

a)

Tax calculation sample for $100,001-$335,000 slab

Tax=15%*50000+(75000-50000)*25%+(100000-75000)*34% Plus 39% of amount over $100,000.

Tax=$22,250 plus 39% of amount over $100,000.

If taxable income is over	But Not over	The tax is
$0	$ 50000	15% of amount over $0
50,001	75,000	$7500 plus 25% of amount over $50,000
75,001	100,000	$13750 plus 34% of amount over $75,000
100,001	335,000	$ 22250 plus 39% of amount over $100,000
335,001	10,000,000	$ 113900 plus 34% of amount over $335,000
10,000,001	15,000,000	$340,000 plus 35% of amount over $10,000,000
15,000,001	18,333,333	$2,090,000 plus 38% of amount over $15,000,000
18,333,334		$3,356,666.54 plus 35% of amount over $18,333,333

B) for income $ 1,350,000 the marginal tax rate is 34%.

C) for income $ 1,350,000 the total tax bill is 113900+(1350000-335000)*34%=$459,000

D) for income $ 1,350,000 average tax rate = Total tax/income= 459000/1350000=34%