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

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 $122,513?

Solutions

Expert Solution

Taxable liability for firm-1,22,513

Total tax-

On first 100000= (50,000*15%)+(25000*25%)+(25000*34%)= (7500+6250+8500)= 22250

On Next 22513=(22513*39%)= 8780.07

Total tax= (8780.07+22250)= 31030.07

Average tax rate= (total tax / total taxable income)

= (31030.07/122513)= 25.3279%

jeff jeffy answered 2 years ago
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