Manny, a single taxpayer, earns $65,000 per year in taxable income and an additional $12,000 per year in city of Boston bonds. If Manny earns an additional $35,000 in taxable income in 2020, what is his marginal tax rate on this income? (Use tax rate schedule.)(Round your final answer to two decimal places.)
A)17.64 percent
B)22.00 percent
C)22.83 percent
D)24.00 percent
E)None of the choices are correct

Question

Quizplus · Accepted Answer

First, we need to determine Manny's taxable income for 2020 by adding his current taxable income and his additional income: $65,000 + $35,000 = $100,000

Next, we need to use the tax rate schedule for single taxpayers for the 2020 tax year:

- 10% on taxable income from $0 to $9,875
- 12% on taxable income from $9,875 to $40,125
- 22% on taxable income from $40,125 to $85,525
- 24% on taxable income from $85,525 to $163,300

Since Manny's taxable income falls within the 22% tax bracket, his marginal tax rate on the additional $35,000 of taxable income is also 22.00 percent.

Manny, a Single Taxpayer, Earns $65,000 Per Year in Taxable