Chuck, a single taxpayer, earns $57,500 in taxable income and $19,500 in interest from an investment in City of Heflin bonds. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
a. If Chuck earns an additional $39,500 of taxable income, what is his marginal tax rate on this income?
b. What is his marginal rate if, instead, he had $39,500 of additional deductions?
Personal Income Tax Rates
Depending on how much an individual earned during a calendar year, they pay a different amount of taxes. The US tax code is progressive, meaning that the more money an individual earns the more it is taxed.
Answer and Explanation: 1
For both questions, the assumption is made that the bonds received from City of Heflin are taxable. Also, the tax rate is for Calendar Year 2019.
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fromChapter 3 / Lesson 5
Learn what income tax liability is. Find out what taxable and adjusted gross income are, discover how to calculate tax liability, and examine common deductions.