Question

Marc, a single taxpayer, earns $41,500 in taxable income and $1,350 in interest from an investment in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2017, what is his current marginal tax rate?

and its NOT 33%

Answer 1

First understand what is marginal tax rate?

It is a tax rate incurred on each additional $ of income. When income increases marginal tax rate also increases. The purpose of such system of tax is that individual with lower income are taxed at low rates than higher income earners i.e based on level of their earnings.

Below i have provided U.S tax rate schedule for year 2017 (source is https://www.irs.com/articles/2017-federal-tax-rates-personal-exemptions-and-standard-deductions)-

answer is:-

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