Question

Use the 2019 U.S. federal tax rates in the table to calculate answers to the questions below. Give all answers to two decimals.

Taxable income	Tax Rate
$0-$9700	10%
9,701-39,475	12
39,476-84,200	22
84,201-160,725	24
160,726-204,100	32
204,101-510,300	35
Over $510,300	37

if you have a taxable income of $384,300.00, what is your

top marginal tax rate?__ %   

total tax bill?__$   

average tax rate? __ %   

Answer 1

Answer to the question no. a:

The income $384,300.00 falles under the slab of $204,101-$510,300. Corresponding to this slab the tax rate is 35%. So, the marginal tax rate for the income earner will be 35%. The marginal tax rate is the rate upto which one part of the income will be taxed. Thus, the tax payer;s one part of the income will be taxed at maximum of 35%.

Answer to the question no. b:

The tax payer will have to pay the total tax as per the following table:

Tax Slab	Taxable amount	Taxable %	Payble Tax
0-9700	9700	10%	970
9701-39475	29774	12%	3572.88
39,476-84,200	44724	22%	9839.28
84,201-160,725	76524	24%	18365.76
160,726-204,100	43374	32%	13879.68
204,101-510,300 (384,300)	180199	35%	63069.65
Total Payble Tax			109697.25

Thus, we will have to calculate only the last slab. In the last slab we have subtracted 204101 from 510300. Thus the total payble tax for the tax payer is $109697.25.

Answer to the question no. c:

The average tax rate is the ratio of total payble tax and the total income multiplied by 100. We have the income $384,300.00 and also the total payble tax 109697.25. Thus the average tax rate (ATR) is

Thus, the average tax rate is 28.54%