Question

Here's the additional Information:

Tax Table:

Single Tax payer for Taxable income of $30,490 at Least $30,450 but less than $30,500 Your Tax is $3,467.

Single Tax Payer for Taxable income of $80,938 at least $80,900 but Less than $80,950 The Tax is $13,743

Tax Rate Schedule:

Single Tax Payer If Taxable Income is over $9,525 but not over $38,700 The Tax is $952.50 plus 12% of the excess over $9.525

Single Tax Payer if taxable income is over $38,700 but not over $82,500 The Tax rate is $4,453.50 plus 22% of the excess over $38,700

Problem 1-46 (LO 1-2, 1-4) Determine the tax liability, marginal tax rate, and average tax rate in each of the following cases Use the appropriate Tax Tables and Tax Rate Schedules. a. Single taxpayer, taxable income of $30,490. b. Single taxpayer, taxable income of $80,938. (Use the tax tables to compute tax liability. For all requirements, round "Average tax rate" to 2 decimal places.) Tax liability Marginal tax rate Average tax rate

Answer 1

	Tax liability	Marginal tax rate	Average tax rate
a.	$3467	12%	11.37%
b.	$13743	22%	16.98%

a.

Tax liability, As given in the tax table= $3467

Marginal tax rate is the tax rate at the payee's highest taxable bracket.

Therefore as per given tax rate schedule, Marginal tax rate= 12%

Average tax rate is calculated as total tax payable divided by taxable income.

Therefore, Average tax rate= $3467/$30490= 11.37%

b.

Similarly,

Tax liability= $13743

Marginal tax rate= 22%

Average tax rate= $13743/$80938= 16.98%