Suppose that Ana is preparing to file her taxes. She is single and currently lives in Denver. Ana earned $110,000 in taxable income in 2022. She reviews the following table, which shows the IRS tax rates for a single taxpayer in 2022. On Annual Taxable Income... Up to $10,275 From $10,275 to $41,775 From $41,775 to $89,075 From $89,075 to $170,050 From $170,050 to $215,950 From $215,950 to $539,900 Over $539,900 The Tax Rate Is... (Percent) 10.0 12.0 22.0 24.0 32.0 35.0 37.0 Based on the IRS table, Ana calculates that her marginal tax rate is Ana calculates that she owes Ana then calculates that her average tax rate is in income taxes for 2022. when her annual taxable income is $110,000. , based on the annual income level and the amount of taxes she owes for 2022. After figuring out what she owes in taxes in 2022, Ana decides to ask an accountant for tax advice. The accountant claims that he has found a legal way to shelter $2,000 of taxable income from the federal government. The maximum amount that Ana is willing to pay to learn this strategy and reduce her taxable income by $2,000 is (Hint: Sheltering some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has $50,000 in taxable income and shelters $10,000 pays income tax on only $40,000.)
Suppose that Ana is preparing to file her taxes. She is single and currently lives in Denver. Ana earned $110,000 in taxable income in 2022. She reviews the following table, which shows the IRS tax rates for a single taxpayer in 2022. On Annual Taxable Income... Up to $10,275 From $10,275 to $41,775 From $41,775 to $89,075 From $89,075 to $170,050 From $170,050 to $215,950 From $215,950 to $539,900 Over $539,900 The Tax Rate Is... (Percent) 10.0 12.0 22.0 24.0 32.0 35.0 37.0 Based on the IRS table, Ana calculates that her marginal tax rate is Ana calculates that she owes Ana then calculates that her average tax rate is in income taxes for 2022. when her annual taxable income is $110,000. , based on the annual income level and the amount of taxes she owes for 2022. After figuring out what she owes in taxes in 2022, Ana decides to ask an accountant for tax advice. The accountant claims that he has found a legal way to shelter $2,000 of taxable income from the federal government. The maximum amount that Ana is willing to pay to learn this strategy and reduce her taxable income by $2,000 is (Hint: Sheltering some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has $50,000 in taxable income and shelters $10,000 pays income tax on only $40,000.)
Chapter11: Investor Losses
Section: Chapter Questions
Problem 63P
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Question
Transcribed Image Text:Suppose that Ana is preparing to file her taxes. She is single and currently lives in Denver. Ana earned $110,000 in taxable income in 2022. She
reviews the following table, which shows the IRS tax rates for a single taxpayer in 2022.
On Annual Taxable Income...
Up to $10,275
From $10,275 to $41,775
From $41,775 to $89,075
From $89,075 to $170,050
From $170,050 to $215,950
From $215,950 to $539,900
Over $539,900
The Tax Rate Is...
(Percent)
10.0
12.0
Ana calculates that she owes
22.0
24.0
32.0
35.0
37.0
Based on the IRS table, Ana calculates that her marginal tax rate is
in income taxes for 2022.
when her annual taxable income is $110,000.
Ana then calculates that her average tax rate is, based on the annual income level and the amount of taxes she owes for 2022.
After figuring out what she owes in taxes in 2022, Ana decides to ask an accountant for tax advice. The accountant claims that he has found a legal
way to shelter $2,000 of taxable income from the federal government.
The maximum amount that Ana is willing to pay to learn this strategy and reduce her taxable income by $2,000 is
(Hint: Sheltering
some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has $50,000 in taxable income
and shelters $10,000 pays income tax on only $40,000.)
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