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.) (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income?

b.What is his marginal rate if, instead, he had $40,000 of additional deductions?

c. What is his average tax rate?

d. What is his effective tax rate?

e.How much federal tax will he owe?

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If taxable income is But not over: over: $ 0 $9,275 $ 9,275 $37,650 $37,650 $91,150 $91,150 $190,150 $190,150 $413,350 $413,350 $415,050 $415,050 If taxable income is over: Schedule X-Single - $466,950 But not over: $ 0 $18,550 $ 18,550 $75,300 2016 Federal Tax Rate Schedule Schedule Y-1-Married Filing Jointly of Qualifying Widow(er) - The tax is: 10% of taxable income $927.50 plus 15% of the excess over $9,275 $5,183.75 plus 25% of the excess over $37,650 $18,558.75 plus 28% of the excess over $91,150 $46,278.75 plus 33% of the excess over $190,150 $119,934.75 plus 35% of the excess over $413,350 The tax is: 10% of taxable income $1,855.00 plus 15% of the excess over $18,550 $ 75,300 $151,900 $10,367.50 plus 25% of the excess over $75,300 $151,900 $231,450 $29,517.50 plus 28% of the excess over $151,900 $231,450 $413,350 $51,791.50 plus 33% of the excess over $231,450 $413,350 $466,950 $111,818.50 plus 35% of the excess over $413,350 $130,578.50 plus 39.6% of the excess over $466,950 $120,529.75 plus 39.6% of the excess over $415,050 If taxable income is But not over: over: $ 0 $13,250 $13,250 $50,400 $ 50,400 $130,150 Schedule Z-Head of Household $6,897.50 plus 25% of the excess over $50,400 $26,835.00 plus 28% of the excess over $130,150 $49,417.00 plus 33% of the excess over $210,800 $413,350 $441,000 $116,258.50 plus 35% of the excess over $413,350 $125,936.00 plus 39.6% of the excess over $441,000 $130,150 $210,800 $210,800 $413,350 $441,000 If taxable income is over: Schedule Y-2-Married Filing Separately The tax is: 10% of taxable income $1,325.00 plus 15% of the excess over $13,250 But not over: $233,475 The tax is: 10% of taxable income $927.50 plus 15% of the excess over $9,275 $ 37,650 $ 75,950 $5,183.75 plus 25% of the excess over $37,650 $75,950 $115,725 $14,758.75 plus 28% of the excess over $75,950 $115,725 $206,675 $25,895.75 plus 33% over $115,725 $206,675 $233,475 $55,909.25 plus 35% of the excess over $206,675 $65,289.25 plus 39.6% of the excess over $233,475 $ 0 $9,275 $ 9,275 $37,650 the excess If taxable income is But not over: over: $ 0 $9,275 $ 9,275 $37,650 $37,650 $91,150 $91,150 $190,150 $190,150 $413,350 $413,350 $415,050 $415,050 If taxable income is over: Schedule X-Single - $466,950 But not over: $ 0 $18,550 $ 18,550 $75,300 2016 Federal Tax Rate Schedule Schedule Y-1-Married Filing Jointly of Qualifying Widow(er) - The tax is: 10% of taxable income $927.50 plus 15% of the excess over $9,275 $5,183.75 plus 25% of the excess over $37,650 $18,558.75 plus 28% of the excess over $91,150 $46,278.75 plus 33% of the excess over $190,150 $119,934.75 plus 35% of the excess over $413,350 The tax is: 10% of taxable income $1,855.00 plus 15% of the excess over $18,550 $ 75,300 $151,900 $10,367.50 plus 25% of the excess over $75,300 $151,900 $231,450 $29,517.50 plus 28% of the excess over $151,900 $231,450 $413,350 $51,791.50 plus 33% of the excess over $231,450 $413,350 $466,950 $111,818.50 plus 35% of the excess over $413,350 $130,578.50 plus 39.6% of the excess over $466,950 $120,529.75 plus 39.6% of the excess over $415,050 If taxable income is But not over: over: $ 0 $13,250 $13,250 $50,400 $ 50,400 $130,150 Schedule Z-Head of Household $6,897.50 plus 25% of the excess over $50,400 $26,835.00 plus 28% of the excess over $130,150 $49,417.00 plus 33% of the excess over $210,800 $413,350 $441,000 $116,258.50 plus 35% of the excess over $413,350 $125,936.00 plus 39.6% of the excess over $441,000 $130,150 $210,800 $210,800 $413,350 $441,000 If taxable income is over: Schedule Y-2-Married Filing Separately The tax is: 10% of taxable income $1,325.00 plus 15% of the excess over $13,250 But not over: $233,475 The tax is: 10% of taxable income $927.50 plus 15% of the excess over $9,275 $ 37,650 $ 75,950 $5,183.75 plus 25% of the excess over $37,650 $75,950 $115,725 $14,758.75 plus 28% of the excess over $75,950 $115,725 $206,675 $25,895.75 plus 33% over $115,725 $206,675 $233,475 $55,909.25 plus 35% of the excess over $206,675 $65,289.25 plus 39.6% of the excess over $233,475 $ 0 $9,275 $ 9,275 $37,650 the excess

Answer rating: 100% (QA)

c d e Answer a Explanation Answer b Explanation 2673 Ma... View the full answer