Question

Chuck, a single taxpayer, earns $64,500 in taxable income and $24,400 in interest from an investment...

Chuck, a single taxpayer, earns $64,500 in taxable income and $24,400 in interest from an investment in City of Heflin bonds.(Use the 2020 U.S tax rate schedule.)

  1. How much federal tax will he owe?
  2. What is his average tax rate?
  3. What is his effective tax rate?
  4. What is his current marginal tax rate?

Homework Answers

Answer #1

1. Computation of Federal Income tax for Chuck:-

Tax is calculated on $75000 only plus 25% excess over $37,950

$5,226.25 + 25% of ($75,000 - $37,950)

=$5,226.25 +0.25 x (37050)

=$5,226.25+9262.5

= $14,488.75


Chuck’s average tax rate:-

2. Average Tax Rate = Total Tax / Taxable Income

= $14,488.75/ $75,000

= 19.32%

3. His effective tax rate:- Total Tax/ Total Income

= $14,488.75/ ($75,000 + $10,000) x100

= $14,488.75/ ($85,000) x100

=17.05%

4. Current marginal tax rate-

Chuck belongs to the 25% tax rate range. This implies that his marginal tax rate on increment in income up to $16,900 and decrement from income up to $37,050 is 25 %.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment...
Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment in City of Heflin bonds. (Use the U.S tax rate schedule.) Required: How much federal tax will he owe? What is his average tax rate? What is his effective tax rate? What is his current marginal tax rate?
Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment...
Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment in City of Heflin bonds. Using the U.S. tax rate schedule, how much federal tax will he owe? What is his average tax rate? What is his effective tax rate? What is his current marginal tax rate? Where did the 4991.25 come from in this answer?
Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment...
Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an 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 deductions?
Chuck, a single taxpayer, earns $57,500 in taxable income and $19,500 in interest from an investment...
Chuck, a single taxpayer, earns $57,500 in taxable income and $19,500 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.) (Do not round intermediate calculations. Round your answers to 2 decimal places.) a. If Chuck earns an additional $39,500 of taxable income, what is his marginal tax rate on this income? b. What is his marginal rate if, instead, he had $39,500 of additional deductions?
Chuck, a single taxpayer, earns $82,000 in taxable income and $17,750 in interest from an investment...
Chuck, a single taxpayer, earns $82,000 in taxable income and $17,750 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.) Required: If Chuck earns an additional $48,250 of taxable income, what is his marginal tax rate on this income? What is his marginal rate if, instead, he had $48,250 of additional deductions? (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.)
2020 tax bracket schedule Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in...
2020 tax bracket schedule Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an 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 deductions? (For all requirements, do not round intermediate calculations. Round percentage answers to 2 decimal places. 2020 tax...
Jackson, a single taxpayer, earns $150,000 in taxable income and $10,000 in interest from an investment...
Jackson, a single taxpayer, earns $150,000 in taxable income and $10,000 in interest from an investment in city of Denver Bonds. Using the U.S. tax rate schedule for year 2018, how much federal tax will he owe? What is his average tax rate? What is his effective tax rate? What is his current marginal tax rate? If Jackson earned an additional $40,000 of taxable income, what is his marginal tax rate on this income? (Round the tax rates to 2...
Marc,a single taxpayer, earns $191,000 in taxable income and $5,900 in interest from an investment in...
Marc,a single taxpayer, earns $191,000 in taxable income and $5,900 in interest from an investment in city of Birmingham bonds. Using the U.S. tax rate schedule for year 2019, what is his current marginal tax rate? (Use Tax rate schedule)
Marc, a single taxpayer, earns $41,500 in taxable income and $1,350 in interest from an investment...
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%
Harvey, a single taxpayer, earns $150,000 in taxable income and $10,000 in interest from an investment...
Harvey, a single taxpayer, earns $150,000 in taxable income and $10,000 in interest from an investment in city of Presque Isle Bonds. Using the U.S. tax rate schedule for year 2020, what is his tax liability? What is his average tax rate? What is his effective tax rate? If Harvey earned an additional $40,000 of taxable income, what is his marginal tax rate on this income? Info: Over: $85,525 but not over: $163,300 the tax is: $14,605.50 plus 24% of...