Question

Country A levies an individual income tax with the following rate structure:

Percentage Rate Bracket

10 % Income from –0– to $20,000

15% Income from $20,001 to $75,000

25% Income from $75,001 to $160,000

30% Income in excess of $160,000

A. Mr. LV’s taxable income is $60,400. Compute his tax and average tax rate. What is Mr. LV’s marginal tax rate?

B. Ms. JC’s taxable income is $320,400. Compute her tax and average tax rate. What is Ms. JC’s marginal tax rate?

Ms. JC’s taxable income is $320,400. Compute her tax and average tax rate. What is Ms. JC’s marginal tax rate? (Round your percentage answers to 2 decimal places and other answer to the nearest dollar amount.)

Income tax ------------

Average tax rate -------------%

Marginal tax rate -------------%

Answer #1

Ans:

1. Taxable Income= 60,400

Tax liability= 10% on 20,000+15% of {60,400-20,000}

=> 2,000+ 15% of 40,400

=> 2,000+ 6,060

=> 8,060

Average Tax rate= Tax liability/ Taxable Income

=> 8,060/60,400

=> 13.34%

Marginal Tax Rate= 15% As Taxable Income Falls between Slab 20,001 to 75,000

2. Taxable income=320,400

Tax liability= 10% of 20,000+ 15 % of {20,000-75,000}+25% of {75,000-160,000}+ 30% of {320,000-160,000}

=> 2,000+ 8,250+ 21,250+ 48,000

=> 79,500

Average Tax Rate= Tax liability/ Taxable Income

=> 79,500/320,400

=> 24.81%

Marginal Tax rate is 30% As Taxable Income Falls in Excess of 160,000

1. Country A levies an individual income tax with the following
rate structure:
Percentage Rate
Bracket
10
%
Income from –0– to $20,000
15
Income from $20,001 to $75,000
25
Income from $75,001 to $160,000
30
Income in excess of $160,000
Required:
Mr. Levi’s taxable income is $69,200. Compute his tax and
average tax rate. What is Mr. Levi’s marginal tax rate?
Ms. Jinn’s taxable income is $184,400. Compute her tax and
average tax rate. What is Ms. Jinn’s marginal...

Government G Levies an income tax with the following rate
structure:
6% income from 0 to 30,000
10% income from 30001 to 70000
20% income from 70001 to 200000
28% income in excess of 200,000
A. Taxpayer A's taxable income is $187.600. compute A's tax and
average tax rate. What is A's marginal tax rate?
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2013 Individual Tax Rates
Single Individuals
If a Corporation's Taxable Income Is
It Pays This
Amount on the
Base of the Bracket
Plus This Percentage
on the Excess over the
Base (Marginal Rate)
Average Tax
Rate at
Top of Bracket
Up to $8,925
$0
10.0%
10.0%
$8,925 - $36,250
892.50
15.0
13.8
$36,250 - $87,850
4,991.25
25.0
20.4
$87,850 - $183,250
17,891.25
28.0
24.3
$183,250 - $398,350
44,603.25
33.0
29.0
$398,350 - $400,000
115,586.25
35.0
29.0
Over $400,000
116,163.75
39.6...

Moose Industries faces the following tax schedule:
Taxable Income Tax on Base of Bracket Percent on Excess Above
Base
Base Up to $50,000 $0 15%
$50,000-$75,000 7,500 25
$75,000-$100,000 13,750 34
$100,000-$335,000 22,250 39
$335,000-$10,000,000 113,900 34
$10,000,000-$15,000,000 3,400,000 35
$15,000,000-$18,333,333 5,150,000 38
Over $18,333,333 6,416,667 35
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a) How much tax does the company owe on this income?
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2020 tax bracket schedule Chuck, a single taxpayer, earns
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investment in City of Heflin bonds. (Use the U.S. tax rate
schedule.) Required: If Chuck earns an additional $40,000 of
taxable income, what is his marginal tax rate on this income? What
is his marginal rate if, instead, he had $40,000 of additional
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2020 tax...

The country of Anteaterland has an income tax rate of 4% that
applies to all income received. The country of Petertopia,
meanwhile, has a tax rate of 2% on the first $20,000 in taxable
income, 4% on the next $20,000 in taxable income, and 6% on all
taxable income above $40,000. The country of Zotlandia collects
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Anteaterland has a ["regressive", "proportional", "progressive"]
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2013 Individual
Tax Rates
Single
Individuals
If a Corporation's Taxable Income Is
It Pays This
Amount on the
Base of the Bracket
Plus This Percentage
on the Excess over the
Base (Marginal Rate)
Average Tax
Rate at
Top of Bracket
Up to $8,925
$0
10.0%
10.0%
$8,925 - $36,250
892.50
15.0
13.8
$36,250 - $87,850
4,991.25
25.0
20.4
$87,850 - $183,250
17,891.25
28.0
24.3
$183,250 - $398,350
44,603.25
33.0
29.0
$398,350 - $400,000
115,586.25
35.0
29.0
Over $400,000
116,163.75
39.6...

2013 Individual Tax Rates
Single Individuals
If a Corporation's Taxable Income Is
It Pays This
Amount on the
Base of the Bracket
Plus This Percentage
on the Excess over the
Base (Marginal Rate)
Average Tax
Rate at
Top of Bracket
Up to $8,925
$0
10.0%
10.0%
$8,925 - $36,250
892.50
15.0
13.8
$36,250 - $87,850
4,991.25
25.0
20.4
$87,850 - $183,250
17,891.25
28.0
24.3
$183,250 - $398,350
44,603.25
33.0
29.0
$398,350 - $400,000
115,586.25
35.0
29.0
Over $400,000
116,163.75
39.6...

if your household income is $60,000 and you are in the tax
bracket of [$50,001-$75,000], with tax rate listed as “25%”,
your average tax rate is 25%
your marginal tax rate is 25%

Chapter 2 - Master it!
Using Excel to find the
marginal tax rate can be accomplished using the VLOOKUP function.
However, calculating the total tax bill is a little more difficult.
Below we have shown a copy of the IRS tax table for an individual.
Often, tax tables are presented in this format.
If taxable
income is
over --
But not
over --
The tax is:
$0
$9,075
10% of the amount over $0
9,075
36,900
$907.50 plus 15% of...

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