Chapter 1 $ 80,000 PROBLEMS ome and deductions for the 1:1-39 Tix Rates. Latesha, a single taxpayer, had the following income and tax year 2018: INCOME: Business Income 25.000 Interest income from taxable bonds 10,000 Tax-exempt bond interest 5,000 TOTAL INCOME 120,000 DEDUCTIONS: Business expenses $ 9,500 Itemized deductions 20,000 TOTAL DEDUCTIONS 29,500 a. Compute Latesha taxable income and federal tax liability for 2018 (round to dollars) b. Compute Latesha's marginal, average, and effective tax rates. c. For tax planning purposes, which of the three rates in Part b is the most important? 2018 TAX RATE SCHEDULES INDIVIDUAL TAXPAYERS Single [S1(c)]: If taxable income is: Not over $9,525 Over $9,525 but not over $38,700 Over $38,700 but not over $82,500 Over $82,500 but not over $157,500 Over $157,500 but not over $200,000 Over $200,000 but not over $500,000 Over $500,000 The tax is: 10% of taxable income $952.50, plus 12% of the excess over 59,525 $4,453.50, plus 22% of the excess over $38,700 $14,089.50, plus 24% of the excess over $82,500 ... $32,089.50, plus 32% of the excess over $157,500 $45,689.50, plus 35% of the excess over $200,000 $150,689.50, plus 37% of the excess over $500,000