Imagine that your total gross income for the year is 103.6 thousand. After all t
ID: 2625164 • Letter: I
Question
Imagine that your total gross income for the year is 103.6 thousand. After all the deductions and exemptions, you find that your taxable income is 84.4 thousand. Assume the federal tax brackets are as follows:
0-9k: 10%
9-36k: 15%
36-88k: 25%
88-183k: 28%
183-398k: 33%
What is the dollar amount of your federal tax liability?
Imagine that your total gross income for the year is 102.3 thousand. After all the deductions and exemptions, you find that your taxable income is 83.2 thousand. Assume the federal tax brackets are as follows:
0-9k: 10%
9-36k: 15%
36-88k: 25%
88-183k: 28%
183-398k: 33%
What is your average federal tax rate? (What percent of your gross income is lost via taxes?)
Enter answer in percents, accurate to 2 decimal places.
Imagine that your total gross income for the year is 94.7 thousand. After all the deductions and exemptions, you find that your taxable income is 72.9 thousand. Assume the federal tax brackets are as follows:
0-9k: 10%
9-36k: 15%
36-88k: 25%
88-183k: 28%
183-398k: 33%
What your marginal federal tax rate? (What percent of your next dollar earned is lost via taxes?)
Enter answer in percents, accurate to 2 decimal places.
Explanation / Answer
1. extra dollar we must earn = $34.1
2. federal tax liability = .1*9+.15*25+.25*(84.4-36) = $16.75 thousand
3. total tax = .1*9+.15*25+.25*(83.2-36) = $ 16.45 thousand
average tax rate = 16.45/83.2 = 19.77%
%of gross income lost via taxes = 16.45/102.3 = 16.08%
4. because it is in a bracket = (36-88)
marginal tax rate = 25%
total tax paid = .1*9+.15*25+.25*(72.9-36) = $13.875 thousand
averagetax rate = 13.875/72.9 = 19.03%