Eccentricity, Incorporated had $300,000 in 2018 taxable income. Using the tax schedule from Table 2.3, what are the company's 2018 income taxes, average tax rate, and marginal tax rate, respectively? Taxable income Pay this amount on Base income Plus this percentage on anything over the base $0 – $50,000 $ 0 15% $50,001 – $75,000 $ 7,500 25% $75,001 – $100,000 $ 13,750 34% $100,001 – $335,000 $ 22,250 39% $335,000 – $10,000,000 $ 113,900 34%
Eccentricity, Incorporated had $300,000 in 2018 taxable income. Using the tax schedule from Table 2.3, what are the company's 2018 income taxes, average tax rate, and marginal tax rate, respectively? Taxable income Pay this amount on Base income Plus this percentage on anything over the base $0 – $50,000 $ 0 15% $50,001 – $75,000 $ 7,500 25% $75,001 – $100,000 $ 13,750 34% $100,001 – $335,000 $ 22,250 39% $335,000 – $10,000,000 $ 113,900 34%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Eccentricity, Incorporated had $300,000 in 2018 taxable income. Using the tax schedule from Table 2.3, what are the company's 2018 income taxes, average tax rate, and marginal tax rate, respectively?
| Taxable income | Pay this amount on Base income | Plus this percentage on anything over the base |
|---|---|---|
| $0 – $50,000 | $ 0 | 15% |
| $50,001 – $75,000 | $ 7,500 | 25% |
| $75,001 – $100,000 | $ 13,750 | 34% |
| $100,001 – $335,000 | $ 22,250 | 39% |
| $335,000 – $10,000,000 | $ 113,900 | 34% |
Expert Solution
Step 1
Eccentricity taxable Income = $300,000
Total Income tax = 22,250 + ( 300,000 - 100,000)*39% = $ 100,250
Average tax paid = $ 100,250 / $ 300,000 * 100 = 33.42 %
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