Question

Susan and Stan Britton are a married couple who file a joint income tax return, where the tax rates are based on the tax table 3.5. Assume that their taxable income this year was $330,000. Do not round intermediate calculation.

1. What is their federal tax liability? Round your answer to the nearest cent.

   $  

2. What is their marginal tax rate? Round your answer to two decimal places.

       %

3. What is their average tax rate? Round your answer to two decimal places.

       %

Answer 1

Given information

taxable income =$330,000

marginal tax rate on this income comes under

$321,451 to $408,200 = 32%

PART A , federal tax liability

the federal tax liability is computed by the predetermined rates with earnings in the specific period of time, and it is paid to the government

federal tax liability = base tax+ (taxable income - base)

here base tax = $ 64,179 +($ 330,000 - $ 315,000) * 32%

=$ 64,179 + ($ 15,000) * 32%

  =$ 64,179 + $ 4800

=$ 68,979

PART B marginal tax rate

=32%

it is the rate calculated above the base tax and it is shown in the table , within the tax bracket

PART C average tax rate

It is the rate at which paid on total taxable income

=22.8%