Marginal tax rates Partner A, a single taxpayer, is one of two partners in a small business. As such, she receives pass-through income that is taxed at her personal tax rates. After all adjustments and deductions have been made, including the 20% qualified business income deduction, she is preparing to calculate her taxes owed for the year. a. Find the marginal tax rate for the following levels of sole proprietorship earnings before taxes: $16,300; $61,200; $91,700; $151,000; $253,000; $451,000; and $1.1 million. b. Plot the marginal tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis). Explain the relationship between these variables.
Marginal tax rates Partner A, a single taxpayer, is one of two partners in a small business. As such, she receives pass-through income that is taxed at her personal tax rates. After all adjustments and deductions have been made, including the 20% qualified business income deduction, she is preparing to calculate her taxes owed for the year. a. Find the marginal tax rate for the following levels of sole proprietorship earnings before taxes: $16,300; $61,200; $91,700; $151,000; $253,000; $451,000; and $1.1 million. b. Plot the marginal tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis). Explain the relationship between these variables.
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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Marginal tax rates Partner A, a single taxpayer, is one of two partners in a small business. As such, she receives pass-through income that is taxed at her personal tax rates. After all adjustments and deductions have been made, including the 20% qualified business income deduction, she is preparing to calculate her taxes owed for the year.
a. Find the marginal tax rate for the following levels of sole proprietorship earnings before taxes: $16,300; $61,200; $91,700; $151,000; $253,000; $451,000; and $1.1 million.
b. Plot the marginal tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis).
Explain the relationship between these variables.
Explain the relationship between these variables.
Chart is attached.
I need help solving thank you
Transcribed Image Text:i
More Info
Tax Rate - Single Taxpayers -2018
O.
Tax calculation
(Marginal rate x amount over base bracket)
Range of taxable income
$0 to
Base tax
+
$9,525
$0
x amount over
(10%
(12%
(22%
(24%
(32%
(35%
(37%
$0)
9,525)
38,700)
82,500)
157,500)
200,000)
500,000)
x amount over
9,525 to
38,700 to
38,700
82,500
953
+
4,454
14,090
32,090
x amount over
x amount over
x amount over
+
82,500 to
157,500 to
200,000 to
Over 500,000
157,500
200,000
+
+
500,000
45,690
x amount over
+
150,690
x amount over
+
Print
Done
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