What is the average tax rate for a firm with taxable income of $118,740 in 2017?
$\begin{array}{c}
\begin{array}{c}
\text { Taxable Income }\
\begin{array}{lll}
\$0&\text { - } &50,000 \
50,001 &\text { - } &75,000 \
75,001&\text { - } &100,000 \
100,001&\text { - } &335,000 \
\end{array}
\end{array}
\begin{array}{c}
\text { Tax Rate}\
15 \% \
25 \
34 \
39
\end{array}
\end{array}$

Question

What is the average tax rate for a firm with taxable income of $118,740 in 2017?  
$\begin{array}{c}
\begin{array}{c}
\text { Taxable Income }\
\begin{array}{lll}
\$0&\text { - } &50,000 \
50,001 &\text { - } &75,000 \
75,001&\text { - } &100,000 \
100,001&\text { - } &335,000 \
\end{array}
\end{array}
\begin{array}{c}
\text { Tax Rate}\
15 \% \
25 \
34 \
39
\end{array}
\end{array}$

Quizplus · Accepted Answer

To calculate the average tax rate, we need to determine the total tax paid and divide it by the taxable income. The tax is calculated in brackets:  - $0 - $50,000 at 15% = $7,500  - $50,001 - $75,000 at 25% = $6,250  - $75,001 - $100,000 at 34% = $8,500  - $100,001 - $118,740 at 39% = $7,336.40  Total tax = $7,500 + $6,250 + $8,500 + $7,336.40 = $29,586.40  Average tax rate = $29,586.40 / $118,740 = 24.89%

What Is the Average Tax Rate for a Firm with Taxable