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 current marginal tax rate?
A) 15.00%
B) 25.00%
C) 28.00%
D) 33.00%
E) None of these

Question

Quizplus · Accepted Answer

To find the marginal tax rate we need to look at the tax rate schedule for year 2014. Since Marc's taxable income is $60,000, he falls into the 25% tax bracket. The interest income does not affect his marginal tax rate since it is taxed at his ordinary income tax rate. Therefore, Marc's current marginal tax rate is 25.00%.

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