From the above info the following are
1)
The Gross Total Income: $77,000
Standard Deduction current year( online) :12,800
Standard Deduction given in problem:14,000
Intemized Deduction: Nil
Taxable Income:$63,000
Mr. Smith Tax Computation for the Year | ||
Salary Amount | $ 20,000.00 | |
Income From Salary | $ 20,000.00 | |
Income from Contract | $ 70,000.00 | |
Less: General Deductions | $ 13,000.00 | |
Income from Bussiness | $ 57,000.00 | |
Gross Total Income | $ 77,000.00 | |
Less: Standard Deduction | $ 14,000.00 | |
Taxable Income | $ 63,000.00 |
2)
The Tax Calculations:
Rate on Taxable Income | Mr Smith pay | |
10% | upto $9,075 | $ 907.50 |
15 | $9,075-$36,900 | $ 4,173.75 |
25% | $36,900-$89,350 | |
25% | $36,900-$63000 | $ 6,525.00 |
* but the total income is $ 63,000 | ||
$ 11,606.25 |
3) The Marginal & Average rate
The Highest slab will be the marginal tax slab | ||
The marginal Tax tax bracket is | 25% | |
Average tax rate is the tax paid on the Income | =$11,606.25/$64,800 | =====>$0.19454 |
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