Tax Table

-Refer to Tax Table.Bavarian Sausage,Inc.has a pretax income of $325,000.What is the company's marginal tax rate?

Question

Tax Table
 
-Refer to Tax Table.Bavarian Sausage,Inc.has a pretax income of $325,000.What is the company's marginal tax rate?

Quizplus · Accepted Answer

To find the marginal tax rate, we need to refer to the Tax Table provided. Based on the taxable income of $325,000, we see that the corresponding tax amount is $100,477.50. To find the marginal tax rate, we need to see how much the tax amount would increase if the taxable income increased by $1. The next bracket in the Tax Table is for taxable income between $321,450 to $408,200, where the tax amount is $108,421.25. Therefore, an additional $1 of taxable income would result in an additional tax of $6,943.75 ($108,421.25 - $100,477.50). This means that the marginal tax rate is 39%; the amount by which the tax increases when the taxable income increases by $1.

Tax Table -Refer to Tax Table.Bavarian Sausage,Inc.has a Pretax Income of $325,000.What