Following is a partial corporate income tax schedule for the current year: Taxab

ID: 2639111 • Letter: F

Question

Following is a partial corporate income tax schedule for the current year:

Taxable Income

Beginning Ending Bracket Marginal

Amount Amount Amount Tax Rate

$1 $50,000 $50,000 0.15

$50,001 $75,000 $25,000 0.25

$75,001 $100,000 $25,000 0.34

The average tax rate for a corporation with taxable income of $85,000 would be:

a.17.2%

b.18.3%

c.20.2%

d.22.9%

e.34.0%

Average tax rate = [(50,000 * 15%) + (25,000 * 25%) + (10,000 * 34%)] / 85,000 = 20.2%.... Thus, Option C