If Jorge and Anita instead had $100,000 of additional tax deductions, their marginal tax rate on the deductions would be 22.41 percent. Marginal Tax Rate = = = 22.41% [LO 3] Scot and Vidia, married taxpayers, earn $240,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. Using the U.S. tax rate schedule for married filing jointly, how much federal tax will they owe? What is their average tax rate? What is their effective tax rate? What is their current marginal tax rate? Scot and Vidia will owe $54,417 in federal income tax this year computed as follows: $54,417 = $52,222.50 + 33% ($240,000 - $233,350). Scot and Vidia’s average tax rate is 22.67 percent. Average Tax Rate = = = 22.67% Scot and effective tax rate is 22.21 percent. Effective tax rate = = = 22.21% Scot and Vidia are currently in the 33 percent tax rate bracket. Their marginal tax rate on increases in income up to $176,700 and deductions up to $6,650 is 33 percent. [LO 3] Using the facts in problem 41, if Scot and Vidia earn an additional $70,000 of taxable income, what is their marginal tax rate on this income? How would your answer differ if they, instead, had $70,000 of additional deductions? If Scot and Vidia earn an additional $70,000 of taxable income, their marginal tax rate on the income is 33 percent. Marginal Tax Rate = = = 33% If Scot and Vidia instead had $70,000 of additional tax deductions, their marginal tax rate on the deductions would be 28.48 percent. Marginal Tax Rate = = = 28.48% [LO 3, LO 4] Melinda invests $200,000 in a City of Heflin bond that pays 6 percent interest. Alternatively, Melinda could have invested the $200,000 in a
If Jorge and Anita instead had $100,000 of additional tax deductions, their marginal tax rate on the deductions would be 22.41 percent. Marginal Tax Rate = = = 22.41% [LO 3] Scot and Vidia, married taxpayers, earn $240,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. Using the U.S. tax rate schedule for married filing jointly, how much federal tax will they owe? What is their average tax rate? What is their effective tax rate? What is their current marginal tax rate? Scot and Vidia will owe $54,417 in federal income tax this year computed as follows: $54,417 = $52,222.50 + 33% ($240,000 - $233,350). Scot and Vidia’s average tax rate is 22.67 percent. Average Tax Rate = = = 22.67% Scot and effective tax rate is 22.21 percent. Effective tax rate = = = 22.21% Scot and Vidia are currently in the 33 percent tax rate bracket. Their marginal tax rate on increases in income up to $176,700 and deductions up to $6,650 is 33 percent. [LO 3] Using the facts in problem 41, if Scot and Vidia earn an additional $70,000 of taxable income, what is their marginal tax rate on this income? How would your answer differ if they, instead, had $70,000 of additional deductions? If Scot and Vidia earn an additional $70,000 of taxable income, their marginal tax rate on the income is 33 percent. Marginal Tax Rate = = = 33% If Scot and Vidia instead had $70,000 of additional tax deductions, their marginal tax rate on the deductions would be 28.48 percent. Marginal Tax Rate = = = 28.48% [LO 3, LO 4] Melinda invests $200,000 in a City of Heflin bond that pays 6 percent interest. Alternatively, Melinda could have invested the $200,000 in a
Solution-Manual-for-Essentials-of-Federal-Taxation-2018-Edition-9th-Edition-By-Spilker.docx