On Taxable Income... The Tax Rate Is... Up to €7,150 10% From €7,150 to €29,050 15% From €29,050 to €70,350 25% From €70,350 to €146,750 28% From €146,750 to €319,100 33% Over €319,100 35% Fill in the following table with Maria's marginal tax rate, total amount of taxes owed, and average tax rate for 2018. Earnings (C) Marginal Tax Rate (%) Taxes Owed (C) Average Tax Rate (%) 50,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Assume a country has the following income tax rates for a single taxpayer in 2018. Maria is single and earned €50,000 in 2018.
On Taxable Income...
The Tax Rate Is...
Up to €7,150
10%
From €7,150 to €29,050
15%
From €29,050 to €70,350
25%
From €70,350 to €146,750
28%
From €146,750 to €319,100
33%
Over €319,100
35%
Fill in the following table with Maria's marginal tax rate, total amount of taxes owed, and average tax rate for 2018.
Earnings (C) Marginal Tax Rate (%)
Taxes Owed (C)
Average Tax Rate (%)
50,000
An accountant claims that she has found a legal way for Maria to shelter €4,000 of taxable income from the government. (Sheltering some income
means avoiding income tax on that income. For example, someone who has €50,000 in income and shelters €10,000 pays income tax on only
€40,000.) The maximum amount that Maria is willing to pay to learn this strategy and reduce her taxable income by €4,000 is
Assume Maria and Stuart both live in the UK and both earned €50,000 in 2018. However, Stuart paid a lower income tax amount than Maria did.
Which of the following may account for the difference? Check all that apply.
O Stuart has a 12-year-old child who lives with Stuart and is in full-time education.
O Stuart receives industrial injuries benefit.
O Stuart lives with a dependent who is permanently and totally disabled.
Transcribed Image Text:On Taxable Income... The Tax Rate Is... Up to €7,150 10% From €7,150 to €29,050 15% From €29,050 to €70,350 25% From €70,350 to €146,750 28% From €146,750 to €319,100 33% Over €319,100 35% Fill in the following table with Maria's marginal tax rate, total amount of taxes owed, and average tax rate for 2018. Earnings (C) Marginal Tax Rate (%) Taxes Owed (C) Average Tax Rate (%) 50,000 An accountant claims that she has found a legal way for Maria to shelter €4,000 of taxable income from the government. (Sheltering some income means avoiding income tax on that income. For example, someone who has €50,000 in income and shelters €10,000 pays income tax on only €40,000.) The maximum amount that Maria is willing to pay to learn this strategy and reduce her taxable income by €4,000 is Assume Maria and Stuart both live in the UK and both earned €50,000 in 2018. However, Stuart paid a lower income tax amount than Maria did. Which of the following may account for the difference? Check all that apply. O Stuart has a 12-year-old child who lives with Stuart and is in full-time education. O Stuart receives industrial injuries benefit. O Stuart lives with a dependent who is permanently and totally disabled.
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