if you have $20000 in your savings account this year and it increases to $25000 next...

if you have $20000 in your savings account this year and it increases to $25000 next year, to what amount does the marginal tax rate apply

Expert Solution

Income tax is applicable to income during the year.

In the given case, increase in savings is assumed to be by way of income (interest or other sources).

Hence amount on which marginal tax rate will apply= End balance-Beginning balance

=$25,000- $20,000 = $5,000.

jeff jeffy answered 2 years ago

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if you have $20000 in your savings account this year and it increases to $25000 next...

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