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#eight The tax rates for a particular year are shown below: Taxable Income Tax Rate $0...

#eight

The tax rates for a particular year are shown below:

Taxable Income Tax Rate
$0 – 50,000 15 %
50,001 – 75,000 25 %
75,001 – 100,000 34 %
100,001 – 335,000 39 %


What is the average tax rate for a firm with taxable income of $126,013?

20.00%

39.00%

25.71%

36.61%

28.20%

Solutions

Expert Solution


Correct option is > 25.71%

Taxable Income

Rate

Allocable income

Cumulative income

Total tax

Rate

Income

Rate x Income

$0 – 50,000

15%

                      50,000

                      50,000

                        7,500

50,001 – 75,000

25%

                      25,000

                      75,000

                        6,250

75,001 – 100,000

34%

                      25,000

                   100,000

                        8,500

100,001 – 335,000

39%

                      26,013

                   126,013

                10,145.07

Total

                   126,013

                     32,395

Average tax rate = Total tax / Allocable income

Average tax rate = 32395 / 126013

Average tax rate = 25.71%

jeff jeffy answered 3 years ago
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