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 for year 2014, what is his average tax rate (rounded)?
A) 18.09%
B) 20.00%
C) 15.69%
D) 25.00%
E) None of these

Question

Quizplus · Accepted Answer

Marc's taxable income is $60,000. The tax rate for taxable income between $36,900 and $91,150 is 25%. So, Marc's tax liability is $15,000. His average tax rate is $15,000/$65,000 = 23.08%. Rounded to the nearest tenth of a percent, his average tax rate is 23.1%.

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