Question

Chuck, a single taxpayer, earns $168,000 in taxable income and $21,750 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.)

A) If Chuck earns an additional $47,250 of taxable income, what is his marginal tax rate on this income?

B) What is his marginal rate if, instead, he had $47,250 of additional deductions?

2018 Tax Rate Schedules Individuals Schedule X-Single But not over: 9,525 38,700 $82.500 $157,500 $200,000 $500,000 If tasable income is over: The tax is: $ 9.525 $ 38,700 $ 82.500 $157.500 $200,000 $500,000 10% of taxable income $952.50 plus 12% of the excess over $9,525 $1,453.50 plus 22% of theexcess over $38,700 $14,009.50 plus 24% of the ercess over $82,500 32,009.50 plus 32% of the excess over $157,500 $45,689.50 plus 35% of the eocess over S200.000 $150,689.50 plus 37% of the excess over $500,000

Answer 1