Average tax rate and marginal tax rate of a single tax payer.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUNDAMENTALS OF FINANCE(LL), Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,525 the tax rate is 10% and after that remaining balance is charged under 12% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($20,000−$9,525)×0.12)=$2,209.50

Hence, taxes are $2,209.50

Calculation of Average tax rate:

Average tax rate=$2,209.50$20,000=0.1105=11.05%

Hence, average tax rate is 11.05%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 12% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700 then, after remaining balance is charged under 22% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($50,000−$38,700)×0.22)=$6,939.50

Hence, taxes are $6,939.50

Calculation of Average tax rate:

Average tax rate=$6,939.50$50,000=0.1388=13.88%

Hence, average tax rate is 13.88%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 22% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($300,000−$200,000)×0.35)=$78,445.50

Hence, taxes are $78,445.50

Calculation of Average tax rate:

Average tax rate=$78445.50$300,000=0.2614=26.14%

Hence, average tax rate is 26.14%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 35% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

If the taxable income is $3,000,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, and up to $500,000 the tax rate is 35% then the remaining balance is charged under 37% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($500,000−$200,000)×0.35)+(($3,000,000−$500,000)×0.37)=$1,075,689.50

Hence, taxes are $1,075,689.50

Calculation of Average tax rate:

Average tax rate=$1,075,689.50$3,000,000=0.3586=35.86%

Hence, average tax rate is 35.86%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 37% incurred on each additional dollar of his income.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Please don't use hand rating

"Dividend paying stocks cannot be growth stocks" Do you agree or disagree? Discuss choosing two stocks to help justify your view.

Answer 2

Question

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUNDAMENTALS OF FINANCE(LL), Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,525 the tax rate is 10% and after that remaining balance is charged under 12% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($20,000−$9,525)×0.12)=$2,209.50

Hence, taxes are $2,209.50

Calculation of Average tax rate:

Average tax rate=$2,209.50$20,000=0.1105=11.05%

Hence, average tax rate is 11.05%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 12% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700 then, after remaining balance is charged under 22% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($50,000−$38,700)×0.22)=$6,939.50

Hence, taxes are $6,939.50

Calculation of Average tax rate:

Average tax rate=$6,939.50$50,000=0.1388=13.88%

Hence, average tax rate is 13.88%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 22% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($300,000−$200,000)×0.35)=$78,445.50

Hence, taxes are $78,445.50

Calculation of Average tax rate:

Average tax rate=$78445.50$300,000=0.2614=26.14%

Hence, average tax rate is 26.14%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 35% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

If the taxable income is $3,000,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, and up to $500,000 the tax rate is 35% then the remaining balance is charged under 37% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($500,000−$200,000)×0.35)+(($3,000,000−$500,000)×0.37)=$1,075,689.50

Hence, taxes are $1,075,689.50

Calculation of Average tax rate:

Average tax rate=$1,075,689.50$3,000,000=0.3586=35.86%

Hence, average tax rate is 35.86%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 37% incurred on each additional dollar of his income.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUNDAMENTALS OF FINANCE(LL), Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,525 the tax rate is 10% and after that remaining balance is charged under 12% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($20,000−$9,525)×0.12)=$2,209.50

Hence, taxes are $2,209.50

Calculation of Average tax rate:

Average tax rate=$2,209.50$20,000=0.1105=11.05%

Hence, average tax rate is 11.05%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 12% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700 then, after remaining balance is charged under 22% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($50,000−$38,700)×0.22)=$6,939.50

Hence, taxes are $6,939.50

Calculation of Average tax rate:

Average tax rate=$6,939.50$50,000=0.1388=13.88%

Hence, average tax rate is 13.88%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 22% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($300,000−$200,000)×0.35)=$78,445.50

Hence, taxes are $78,445.50

Calculation of Average tax rate:

Average tax rate=$78445.50$300,000=0.2614=26.14%

Hence, average tax rate is 26.14%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 35% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

If the taxable income is $3,000,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, and up to $500,000 the tax rate is 35% then the remaining balance is charged under 37% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($500,000−$200,000)×0.35)+(($3,000,000−$500,000)×0.37)=$1,075,689.50

Hence, taxes are $1,075,689.50

Calculation of Average tax rate:

Average tax rate=$1,075,689.50$3,000,000=0.3586=35.86%

Hence, average tax rate is 35.86%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 37% incurred on each additional dollar of his income.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUNDAMENTALS OF FINANCE(LL), Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,525 the tax rate is 10% and after that remaining balance is charged under 12% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($20,000−$9,525)×0.12)=$2,209.50

Hence, taxes are $2,209.50

Calculation of Average tax rate:

Average tax rate=$2,209.50$20,000=0.1105=11.05%

Hence, average tax rate is 11.05%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 12% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700 then, after remaining balance is charged under 22% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($50,000−$38,700)×0.22)=$6,939.50

Hence, taxes are $6,939.50

Calculation of Average tax rate:

Average tax rate=$6,939.50$50,000=0.1388=13.88%

Hence, average tax rate is 13.88%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 22% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($300,000−$200,000)×0.35)=$78,445.50

Hence, taxes are $78,445.50

Calculation of Average tax rate:

Average tax rate=$78445.50$300,000=0.2614=26.14%

Hence, average tax rate is 26.14%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 35% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

If the taxable income is $3,000,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, and up to $500,000 the tax rate is 35% then the remaining balance is charged under 37% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($500,000−$200,000)×0.35)+(($3,000,000−$500,000)×0.37)=$1,075,689.50

Hence, taxes are $1,075,689.50

Calculation of Average tax rate:

Average tax rate=$1,075,689.50$3,000,000=0.3586=35.86%

Hence, average tax rate is 35.86%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 37% incurred on each additional dollar of his income.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUNDAMENTALS OF FINANCE(LL), Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,525 the tax rate is 10% and after that remaining balance is charged under 12% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($20,000−$9,525)×0.12)=$2,209.50

Hence, taxes are $2,209.50

Calculation of Average tax rate:

Average tax rate=$2,209.50$20,000=0.1105=11.05%

Hence, average tax rate is 11.05%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 12% incurred on each additional dollar of his income.

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700 then, after remaining balance is charged under 22% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($50,000−$38,700)×0.22)=$6,939.50

Hence, taxes are $6,939.50

Calculation of Average tax rate:

Average tax rate=$6,939.50$50,000=0.1388=13.88%

Hence, average tax rate is 13.88%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 22% incurred on each additional dollar of his income.

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($300,000−$200,000)×0.35)=$78,445.50

Hence, taxes are $78,445.50

Calculation of Average tax rate:

Average tax rate=$78445.50$300,000=0.2614=26.14%

Hence, average tax rate is 26.14%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 35% incurred on each additional dollar of his income.

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

If the taxable income is $3,000,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, and up to $500,000 the tax rate is 35% then the remaining balance is charged under 37% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($500,000−$200,000)×0.35)+(($3,000,000−$500,000)×0.37)=$1,075,689.50

Hence, taxes are $1,075,689.50

Calculation of Average tax rate:

Average tax rate=$1,075,689.50$3,000,000=0.3586=35.86%

Hence, average tax rate is 35.86%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 37% incurred on each additional dollar of his income.

Answer 6

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUNDAMENTALS OF FINANCE(LL), Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,525 the tax rate is 10% and after that remaining balance is charged under 12% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($20,000−$9,525)×0.12)=$2,209.50

Hence, taxes are $2,209.50

Calculation of Average tax rate:

Average tax rate=$2,209.50$20,000=0.1105=11.05%

Hence, average tax rate is 11.05%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 12% incurred on each additional dollar of his income.

Answer 7

Chapter 3, Problem 26QP

a)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

Answer 8

a)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $20,000.

The slab rates of single tax payers are as follows, they are

FUNDAMENTALS OF FINANCE(LL), Chapter 3, Problem 26QP

If the taxable income is $20,000 then up to $9,525 the tax rate is 10% and after that remaining balance is charged under 12% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($20,000−$9,525)×0.12)=$2,209.50

Hence, taxes are $2,209.50

Calculation of Average tax rate:

Average tax rate=$2,209.50$20,000=0.1105=11.05%

Hence, average tax rate is 11.05%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 12% incurred on each additional dollar of his income.

Answer 9

a)

Expert Solution

Answer 10

a)

Expert Solution

Answer 11

Expert Solution

Answer 12

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700 then, after remaining balance is charged under 22% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($50,000−$38,700)×0.22)=$6,939.50

Hence, taxes are $6,939.50

Calculation of Average tax rate:

Average tax rate=$6,939.50$50,000=0.1388=13.88%

Hence, average tax rate is 13.88%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 22% incurred on each additional dollar of his income.

Answer 13

b)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

Answer 14

b)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $50,000.

If the taxable income is $50,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700 then, after remaining balance is charged under 22% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($50,000−$38,700)×0.22)=$6,939.50

Hence, taxes are $6,939.50

Calculation of Average tax rate:

Average tax rate=$6,939.50$50,000=0.1388=13.88%

Hence, average tax rate is 13.88%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 22% incurred on each additional dollar of his income.

Answer 15

b)

Expert Solution

Answer 16

b)

Expert Solution

Answer 17

Expert Solution

Answer 18

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($300,000−$200,000)×0.35)=$78,445.50

Hence, taxes are $78,445.50

Calculation of Average tax rate:

Average tax rate=$78445.50$300,000=0.2614=26.14%

Hence, average tax rate is 26.14%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 35% incurred on each additional dollar of his income.

Answer 19

c)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

Answer 20

c)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $300,000.

If the taxable income is $300,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, then the remaining balance is charged under 35% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($300,000−$200,000)×0.35)=$78,445.50

Hence, taxes are $78,445.50

Calculation of Average tax rate:

Average tax rate=$78445.50$300,000=0.2614=26.14%

Hence, average tax rate is 26.14%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 35% incurred on each additional dollar of his income.

Answer 21

c)

Expert Solution

Answer 22

c)

Expert Solution

Answer 23

Expert Solution

Answer 24

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

If the taxable income is $3,000,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, and up to $500,000 the tax rate is 35% then the remaining balance is charged under 37% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($500,000−$200,000)×0.35)+(($3,000,000−$500,000)×0.37)=$1,075,689.50

Hence, taxes are $1,075,689.50

Calculation of Average tax rate:

Average tax rate=$1,075,689.50$3,000,000=0.3586=35.86%

Hence, average tax rate is 35.86%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 37% incurred on each additional dollar of his income.

Answer 25

d)

Summary Introduction

To determine: Average tax rate and marginal tax rate of a single tax payer.

Answer 26

d)

Expert Solution

Explanation of Solution

Given information:

The income of the single tax payer is $3,000,000.

If the taxable income is $3,000,000 then up to $9,525 the tax rate is 10%, after that tax rate is 12% up to $38,700, up to $82,500 the tax rate is 22% and up to $157,500 the tax rate is 24% and up to $200,000 the tax rate is 32%, and up to $500,000 the tax rate is 35% then the remaining balance is charged under 37% tax rate.

Calculation of taxes:

Taxes=($9,525×0.10)+(($38,700−$9,525)×0.12)+(($82,500−$38,700)×0.22)+(($157,000−$82,500)×0.24)+(($200,000−$157,000)×0.32)+(($500,000−$200,000)×0.35)+(($3,000,000−$500,000)×0.37)=$1,075,689.50

Hence, taxes are $1,075,689.50

Calculation of Average tax rate:

Average tax rate=$1,075,689.50$3,000,000=0.3586=35.86%

Hence, average tax rate is 35.86%

The marginal rate of tax is the tax rate that a person is incurred on his income of each additional dollar. Here the marginal rate is 37% incurred on each additional dollar of his income.