Question

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. _________ _____________ % ______________ %

Answer 1

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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