Question

Jorge and Anita, married taxpayers, earn $150,000 in taxable income and $40,000 in interest from an investment in City of Heflin bonds (Use the U.S. tax rate schedule for married filing jointly). Required: 3. If Jorge and Anita earn an additional $100,000 of taxable income, what is their marginal tax rate on this income b. What is their marginal rate if, instead, they report an additional $100,000 in deductions? (For all requirements, round your answers to 2 decimal places.) Marginal tax rate Marginal tax rate b.

i keeo getting the answer wrong

Answer 1

a) Marginal tax rate = Maximum income slab rate in which taxable income falls. 2019 federal income tax brackets Only the taxable income shall be considered for checking applicable tax rate while calculating tax payable for the tax year. (for taxes due in April 2020, or in October 2020 with an extension) Tax rate Single Married, filing jointly Married, filing separately Head of household Taxable income given Add: Additional taxable income Total taxable income $150,000 $100,000 $250,000 10% $0 to $9,700 $0 to $19,400 $0 to $9,700 $0 to $13,850 12% $9,701 to $39,475 $19,401 to $78,950 $9,701 to $39,475 $13,851 to $52,850 Jorge and Anita, married taxpayers, are filing returns jointly. Therefore, as per U.S.Tax slab rate table presented, taxable income of $250000 falls in the tax slab of 24%: $168,401 to $321,450. Therefore, marginal tax rate will be 24.00%. 22% $39,476 to $84,200 $78,951 to $168,400 $39,476 to $84,200 $52,851 to $84,200 24% $84,201 to $160,725 $168,401 to $321,450 $84,201 to $160,725 $84,201 to $160,700 b) Taxable income given Less: Additional deductions Total taxable income $150,000 $100,000 $50,000 32% $160,726 to $204,100 $321,451 to $408,200 $160,726 to $204,100 $160,701 to $204,100 35% $204,101 to $510,300 $408,201 to $612,350 $204,101 to $306,175 $204,101 to $510,300 Jorge and Anita, married taxpayers, are filing returns jointly. Therefore, as per U.S.Tax slab rate table presented, taxable income of $50000 falls in the tax slab of 12%: $19,401 to $78,950. Therefore, marginal tax rate will be 12.00%. 37% $510,301 or more $612,351 or more $306,176 or more $510,301 or more