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23 July, 17:43

Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham bonds. Using the U. S. tax rate schedule for 2019, what is his average tax rate (rounded)

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  1. 23 July, 17:56
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    Average tax rate = 15.0975%

    Explanation:

    U. S. tax rate schedule for 2019

    ($39,475 to $84,200) = $4,543 + (22% over $39,475)

    Total income = $65,000

    Taxable income = $60,000

    $5,000 are not include in taxable income.

    Computation:

    Tax liability ($39,475 to $84,200) = $4,543 + ($60,000 - $39,475) * 22%

    Tax liability ($39,475 to $84,200) = $4,543 + $4,515.5

    Tax liability ($39,475 to $84,200) = $9,058.5

    Average tax rate = $9,058.5 / $60,000

    Average tax rate = 0.150975

    Average tax rate = 15.0975%
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