Katie has taxable income of $45,000. She is single and her tax rates are 10% on the first $7,000 of taxable income, 15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder. What is Katie's average tax rate? (Keep 4 decimal places)
Katie has taxable income of $45,000. She is single and her tax rates are 10% on the first $7,000 of taxable income, 15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder. What is Katie's average tax rate? (Keep 4 decimal places)
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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Katie has taxable income of $45,000. She is single and her tax rates are 10% on the first $7,000 of taxable income, 15% of the amount over $7,000 up to $28,400 of taxable income and 25% on the remainder. What is Katie's average tax rate? (Keep 4 decimal places)
Expert Solution
Step 1
The tax rate may differ from one taxpayer to another because tax depends on filing status and taxable income. The taxable income is used to determine the tax liability, that is the tax required to be paid by the taxpayer. The average tax rate indicates the overall tax rate or percent of taxable income paid as income taxes.
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