Xavier is single and has taxable income of $83,025 that is taxed as follows: His average tax rate is:
A) 10%.
B) 15%.
C) 20%.
D) 25%.

Question

Xavier is single and has taxable income of $83,025 that is taxed as follows:  His average tax rate is:
A) 10%. 
B) 15%. 
C) 20%. 
D) 25%.

Quizplus · Accepted Answer

To find the average tax rate, we need to divide the total tax paid by the taxable income.

The tax paid can be calculated as follows:

- $9,700 at 10% = $970 
- ($39,475 - $9,700) at 12% = $3,573 
- ($84,200 - $39,475) at 22% = $10,989 
- ($83,025 - $84,200) at 24% = -$418 (tax refund)

Total tax paid = $14,132

Average tax rate = Total tax paid / Taxable income = $14,132 / $83,025 = 0.1701 or 17.01%

Rounded to the nearest whole number, the answer is C) 20%.

Xavier Is Single and Has Taxable Income of $83,025 That