Question

Determine the tax liability, marginal tax rate, and average tax rate in each of the following...

Determine the tax liability, marginal tax rate, and average tax rate in each of the following cases.

Use the appropriate 2019 Tax Tables and Tax Rate Schedules.

1. Married taxpayers, who file a joint return, have taxable income of \$38,862.
2. Single taxpayer, has taxable income of \$61,229.

(For all requirements, use the tax tables to compute tax liability. Round "Average tax rate" to 2 decimal places.)

Tax Liability Marginal Tax Rate Average Tax Rate

A. _________ _____________ % ______________ %

B. _________ _____________ % ______________ %

A) Calculation for tax liability

 Range of taxable income Tax Rate Tax liability \$ 0 to \$ 19,400 10% \$ 1,940 \$ 19,401 to \$ 38,862 12% \$2,335.44 Tax liability = \$4,275.44

Marginal tax rate = 12% , because if net taxable income increase now by \$ 1 then for it 12% tax to be paid.

Average tax rate = [Total tax liability / Total taxable income ] X 100%

Average tax rate = [ \$ 4,275.44 / \$ 38,862 ] X 100%

Average tax rate = 11.00 %

B) Calculation for tax liability

 Range of taxable income Tax Rate Tax liability \$ 0 to \$ 9,700 10% \$ 970 \$ 9,701 to \$ 39,475 12% \$ 3,573 \$ 39,476 to \$ 61,229 22% \$4,785.88 Tax liability = \$9,328.88

Marginal tax rate = 22% , because if net taxable income increase now by \$ 1 then for it 22% tax to be paid .

Average tax rate = [ Tax liability / Total taxable income ] X 100 %

Average tax rate = [ \$ 9,328.88/ \$ 61,229] X 100%

Average tax rate = 15.24 %

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