New Hope Managed Care Inc. is a for-profit managed care company that serves the southwest United States. Last year, it reported $1, 200,000 in income from operations, $250,000 in interest income from bonds it bought in the previous year, and $60,000 in dividend income from shares in a large drug company. What is New Hope's average tax rate? Taxable Income Tax Average Tax Rate at Top of Bracket Up to $50,000 15% of taxable income 15.0% $50,001- $7,500+25% of excess 18.3% $75,000 over $50,000 $75,001- $13,750+34% of excess 22.3% $100,000 over $75,000 $100,001- $22,250+39% of excess 34.0% $335,000 over 100,000 $335,001- $113,900+34% of excess 34.0% $10,000,000 over $335,000 $10,000,001- $3,400,000+35% of excess 34.3% $15,000,000 over $10,000,000 $15,000,001- $5,150,000+38% of excess 35.0% $18,333,333 over $15,000,000 Over $6,416,667+35% of excess 35.0% $18,333,333 over $18,333,333
New Hope Managed Care Inc. is a for-profit managed care company that serves the southwest United States. Last year, it reported $1, 200,000 in income from operations, $250,000 in interest income from bonds it bought in the previous year, and $60,000 in dividend income from shares in a large drug company. What is New Hope's average tax rate? Taxable Income Tax Average Tax Rate at Top of Bracket Up to $50,000 15% of taxable income 15.0% $50,001- $7,500+25% of excess 18.3% $75,000 over $50,000 $75,001- $13,750+34% of excess 22.3% $100,000 over $75,000 $100,001- $22,250+39% of excess 34.0% $335,000 over 100,000 $335,001- $113,900+34% of excess 34.0% $10,000,000 over $335,000 $10,000,001- $3,400,000+35% of excess 34.3% $15,000,000 over $10,000,000 $15,000,001- $5,150,000+38% of excess 35.0% $18,333,333 over $15,000,000 Over $6,416,667+35% of excess 35.0% $18,333,333 over $18,333,333
Chapter12: Tax Credits And Payments
Section: Chapter Questions
Problem 28P
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Transcribed Image Text:New Hope Managed Care Inc. is a for-profit managed care company
that serves the southwest United States. Last year, it reported $1,
200,000 in income from operations, $250,000 in interest income from
bonds it bought in the previous year, and $60,000 in dividend income
from shares in a large drug company. What is New Hope's average tax
rate?
Taxable
Income
Tax
Average Tax Rate at
Top of Bracket
Up to $50,000
15% of taxable income
15.0%
$50,001-
$7,500+25% of excess
18.3%
$75,000
over $50,000
$75,001-
$13,750+34% of excess
22.3%
$100,000
over $75,000
$100,001-
$22,250+39% of excess
34.0%
$335,000
over 100,000
$335,001-
$113,900+34% of excess
34.0%
$10,000,000
over $335,000
$10,000,001-
$3,400,000+35% of excess
34.3%
$15,000,000
over $10,000,000
$15,000,001-
$5,150,000+38% of excess
35.0%
$18,333,333
over $15,000,000
Over
$6,416,667+35% of excess
35.0%
$18,333,333
over $18,333,333
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