Marginal and average tax rates Using the tax rate schedule given here perform th

Question

Marginal and average tax rates Using the tax rate schedule given here perform the followin a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of partnership eanings before taxes: S14,600; $80,100; $303,000 $495,000 $1.1 million, $1.6 million; and $1.9 million. b. Plot the average tax rates (measured on the y axis) against the pretax income levels (measured on the x axis). What generalization can be made concerning the relationship between these variables? a. Find the marginal tax rate for the following levels of corporate earnings before taxes: $14,600; S80,100; S303,000; $495,000; $1,100,000; $1.6 million; and $1.9 million. The tax liability for earnings before taxes of $14,600 is $ (Round to the nearest dollar.) More Info Corporate Tax Rate Schedule Tax calculation (Marginal rate xamount over base bracket) Range of taxable income Base tax $0 to 9,525 to 38,700 to 82,500 to 157,500 to 200,000 to Over 500,000 S9,525 38,700 82,500 157,500 200,000 500,000 $0 + (10% x amount over 953 + (12% amount over 4.454 + (22% amount over 14.090 + (24% amount over 32,090 + (32% amount over 45,690 + (35% x amount over 150,690 + (37% x amount over S0) 9,525) 38,700) 82,500) 157,500) 200,000) 500,000) nter your a Print Done

Explanation / Answer

PROFIT BEFORE TAX TAX CALCULATION TAX AMOUNT AVG. TAX RATE

$14600 upto $9525 = 10%: $953

balance $5075 =12% i.e.609 $1562 10.7% (1562/14600)

$80100 $4454+ 22%of 41400 $13562 16.93%

$303000 $45690+ 35% of 103000 $81740 26.98%

$495000 $45690+ 35% of 295000 $148940 30.09%

$1100000 $150690+ 37%of 600000 $372690 33.88%

$1600000 $150690+ 37% of 1100000 $557690 34.85%

$1900000 $150690+ 37%of 1400000 $668690 35.19%

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---