Chuck, a single taxpayer, earns $78,800 in taxable income and $14,400 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.) Required: a. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income? b. What is his marginal rate if, instead, he had $40,000 of additional deductions? Note: For all requirements, do not round intermediate calculations. Round percentage answers to 2 decimal places. a. Marginal tax rate b. Marginal tax rate %
Chuck, a single taxpayer, earns $78,800 in taxable income and $14,400 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.) Required: a. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income? b. What is his marginal rate if, instead, he had $40,000 of additional deductions? Note: For all requirements, do not round intermediate calculations. Round percentage answers to 2 decimal places. a. Marginal tax rate b. Marginal tax rate %
Chapter1: Federal Income Taxation—an Overview
Section: Chapter Questions
Problem 43P
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Question
Transcribed Image Text:Chuck, a single taxpayer, earns $78,800 in taxable income and $14,400 in interest from an investment in City of
Heflin bonds. (Use the U.S. tax rate schedule.)
Required:
a. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income?
b. What is his marginal rate if, instead, he had $40,000 of additional deductions?
Note: For all requirements, do not round intermediate calculations. Round percentage answers to 2 decimal
places.
a. Marginal tax rate
b. Marginal tax rate
%
%
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