Question

Chuck, a single taxpayer, earns $84,500 in taxable income and $23,000 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.) Required: If Chuck earns an additional $56,000 of taxable income, what is his marginal tax rate on this income? What is his marginal rate if, instead, he had $56,000 of additional deductions? (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.)

	a. Marginal tax rate    % b. Marginal tax rate %

2018 Tax Rate Schedules

Individuals

Schedule X-Single

If taxable income is over:	But not over:	The tax is:
$           0	$    9,525	10% of taxable income
$    9,525	$ 38,700	$952.50 plus 12% of the excess over $9,525
$ 38,700	$ 82,500	$4,453.50 plus 22% of the excess over $38,700
$ 82,500	$157,500	$14,089.50 plus 24% of the excess over $82,500
$157,500	$200,000	$32,089.50 plus 32% of the excess over $157,500
$200,000	$500,000	$45,689.50 plus 35% of the excess over $200,000
$500,000	—	$150,689.50 plus 37% of the excess over $500,000

Answer 1