Marc,a single taxpayer,earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham Bonds.Using the U.S.tax rate schedule in the text for year 2017,how much federal tax will he owe? (Use tax rate schedule in the text)

Question

Quizplus · Accepted Answer

First, we need to calculate the taxable income by subtracting any deductions or exemptions. Assuming Marc has no deductions or exemptions, his taxable income would be $65,000 ($60,000 in income + $5,000 in interest).

Next, we need to use the tax rate schedule for 2017 to determine the amount of tax owed.

For single taxpayers with taxable income between $37,951 and $91,900, the tax rate is 25%.

So, Marc's federal tax owed would be:

($37,950 x 0.10) + (($65,000 - $37,951) x 0.25) = $10,737.50

Rounding up to the nearest cent, the answer is C, $10,738.75.

Marc,a Single Taxpayer,earns $60,000 in Taxable Income and $5,000 in Interest