If your income is $40,000 and your income tax liability is $6000,which of the following correctly calculates your tax burden

Question

Quizplus · Accepted Answer

The average tax rate is calculated by dividing the total tax liability ($6000) by the taxable income ($40,000) and expressing it as a percentage.

Average tax rate = (total tax liability / taxable income) x 100
= (6000 / 40000) x 100
= 15%

Therefore, the correct choice is D, which states that the average tax rate is 15 percent. The marginal tax rate, on the other hand, refers to the tax rate that applies to the last dollar earned and may be different from the average tax rate.

If Your Income Is $40,000 and Your Income Tax Liability