Mary has an $85,769 adjusted gross income and $10,000 of non-refundable tax cred

Question

Mary has an $85,769 adjusted gross income and $10,000 of non-refundable tax credits. She is a resident of Manitoba. Use the 2008 tax rates.

In solving the  problem,when your taxable income lies exactly on the border of the 22% bracket ( so that adding one dollar takes it to the beginning of the net bracket), choose the next bracket i.e. 26% as the marginal rate for your federal tax, then also add  the marginal rate from the  last bracket of the provincial tax in order to get the overall marginal tax rate.

1  Calculate the total tax payable

a) $23,222 b) $22,782 c) $23,941 d) $23,655

2  Calculate the average tax rate

a) 39.4% b) 31.2%   c)43.4% d)30.0%

3  Calculate the marginal tax rate

a) 39.4% b)31.2%  c)43.4% d)30.0%

  

Mary has an $85,769 adjusted gross income and $10,000 of non-refundable tax credits. She is a resident of Manitoba. Use the 2008 tax rates. In solving the problem,when your taxable income lies exactly on the border of the 22% bracket ( so that adding one dollar takes it to the beginning of the net bracket), choose the next bracket i.e. 26% as the marginal rate for your federal tax, then also add the marginal rate from the last bracket of the provincial tax in order to get the overall marginal tax rate. Calculate the total tax payable $23,222 b) $22,782 c) $23,941 d) $23,655 Calculate the average tax rate 39.4% b) 31.2% c)43.4% d)30.0% Calculate the marginal tax rate 39.4% b)31.2% c)43.4% d)30.0%

Explanation / Answer

1)b

2)a

3)d

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