Question

25)

Leonardo, who is married but files separately, earns $64,000 of taxable income. He also has $16,800 in city of Tulsa bonds. His wife, Theresa, earns $51,800 of taxable income.

If Leonardo and his wife file married filing jointly in 2020, what would be their average tax rate?(Use tax rate schedule.) (Round your final answer to two decimal places.)

Multiple Choice

• 12.00 percent

• 22.00 percent

• 14.73 percent

• 21.78 percent

• None of the choices are correct

Answer 1

Answer:
Income taxable = $ 64,000 + $ 51,800	$ 115,800
The above income falls under category of tax bracket of
$ 9,235 plus 22% of the amount over $ 80,250
Income Tax payable          =   ( $ 9,235 + ($ 115,800 (-) $ 80,250 ) x 22% )          =    $ 9,235 + $ 7,821          =    $ 17,056
Average tax rate           = Income Tax payable / Taxable Income           =     $ 17,056 /$ 115,800	14.73%
Average tax rate	14.73%
Option (c ) is Correct