Alan and Sara Winthrop are a married couple who file a joint income tax return. They have two children, and they have legitimate itemized deductions totaling $27,750. Their total income from wages is $235,300. Assume the following tax table is applicable: Married Couples Filing Joint Returns If Your Taxable Income Is You Pay This Amount on the Base of the Bracket Plus This Percentage on the Excess over the Base Average Tax Rate at Top of Bracket Up to $19,750 $0.00 10.0% 10.0% $19,750-$80,250 1,975.00 12.0 11.5 $80,250-$171,050 9,235.00 22.0 17.1 $171,050-$326,600 29,211.00 24.0 20.4 $326,600-$414,700 66,543.00 32.0 22.8 $414,700-$622,050 94,735.00 35.0 26.9 Over $622,050 167,307.50 37.0 37.0 What is their marginal tax rate?
Alan and Sara Winthrop are a married couple who file a joint income tax return. They have two children, and they have legitimate itemized deductions totaling $27,750. Their total income from wages is $235,300. Assume the following tax table is applicable: Married Couples Filing Joint Returns If Your Taxable Income Is You Pay This Amount on the Base of the Bracket Plus This Percentage on the Excess over the Base Average Tax Rate at Top of Bracket Up to $19,750 $0.00 10.0% 10.0% $19,750-$80,250 1,975.00 12.0 11.5 $80,250-$171,050 9,235.00 22.0 17.1 $171,050-$326,600 29,211.00 24.0 20.4 $326,600-$414,700 66,543.00 32.0 22.8 $414,700-$622,050 94,735.00 35.0 26.9 Over $622,050 167,307.50 37.0 37.0 What is their marginal tax rate?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Alan and Sara Winthrop are a married couple who file a joint income tax return. They have two children, and they have legitimate itemized deductions totaling $27,750. Their total income from wages is $235,300. Assume the following tax table is applicable:
Married Couples Filing Joint Returns
| If Your Taxable Income Is | You Pay This Amount on the Base of the Bracket | Plus This Percentage on the Excess over the Base | Average Tax Rate at Top of Bracket | |
| Up to $19,750 | $0.00 | 10.0% | 10.0% | |
| $19,750-$80,250 | 1,975.00 | 12.0 | 11.5 | |
| $80,250-$171,050 | 9,235.00 | 22.0 | 17.1 | |
| $171,050-$326,600 | 29,211.00 | 24.0 | 20.4 | |
| $326,600-$414,700 | 66,543.00 | 32.0 | 22.8 | |
| $414,700-$622,050 | 94,735.00 | 35.0 | 26.9 | |
| Over $622,050 | 167,307.50 | 37.0 | 37.0 |
What is their marginal tax rate?
Expert Solution
Step 1
SOLUTION
CALCULATION-
| PARTICULARS | AMOUNT |
| INCOME | 235300 |
| LESS - ITEMIZED DEDUCTIONS | -27750 |
| TAXABLE INCOME | 207550 |
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