Question

Assume that you face the marginal tax rate schedule below and your income is $66,453. What...

Assume that you face the marginal tax rate schedule below and your income is $66,453. What is your total tax?

Income Marginal Tax rate

Up to $15,600       10%
$15,600-63,000     15%
$63,000-128,500   25%
Over   $128,500     33%

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Answer #1

Given that, total taxable income=$66,453
Using the marginal tax rate, we will have the following tax amounts:

Up to $15,600 tax rate is 10%
Tax amount for $15,600=$15600*10%=$1560

Amount above $15600 and up to $63000 is charged with a tax rate of 15%.

Taxable income under 15% tax rate is $63000-$15600=$47400
Tax amount=$47400*15%=$7110

Amount above $63,000 up to $128,500 is charged with a tax rate of 25%.
Amount above $63,000 =$66,453-$63,000=$3453
Tax amount for $3453=$3453*25%=$863.25

Total tax amount=$1560+$7110+$863.25=$9533.25

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