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30 October, 14:49

Marc, a single taxpayer, earns $100,000 in taxable income and $10,000 in interest from an investment in city of Birmingham Bonds. Using the U. S. tax rate schedule for year 2018, what is his effective tax rate (rounded) ? (Tax rate schedule

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  1. 30 October, 15:10
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    The answer is: Marc's effective tax rate is 18.29% equivalent to $18,289.50

    Explanation:

    Marc is a single filer, so his taxable income of $100,000 falls under the fourth tax bracket ($82,501 to $157,500) with a tax rate of 24%. To calculate Marc's effective tax rate:

    Taxes due = $14,089.50 + [24% x ($100,000 - $82,500) ]

    = $14,089.50 + (24% x $17,500)

    = $14,089.50 + $4,200

    = $18,289.50

    So Marc's effective tax rate (ETR) = ($18,289.50 / $100,000) x 100 = 18.29%

    Note: The $10,000 Marc earned in interest from municipal bonds (City of Birmingham bonds) are tax exempt, so they are not included in these calculations.
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Home » Business » Marc, a single taxpayer, earns $100,000 in taxable income and $10,000 in interest from an investment in city of Birmingham Bonds. Using the U. S. tax rate schedule for year 2018, what is his effective tax rate (rounded) ? (Tax rate schedule
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