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

Question

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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 Corporate Finance, 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.

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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 Corporate Finance, 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.

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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 Corporate Finance, 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.

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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 Corporate Finance, 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.

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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 Corporate Finance, 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 Corporate Finance, 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 Corporate Finance, 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.