Suppose that in addition to the $300,000 of taxable income from operations, Liam's Burgers, Inc. received $25,000 of interest on state-issued bonds and $50,000 of dividends on common stock it owns in Sodas, Inc. Using the tax schedule in Table 2.3 what is Liam's income tax liability? What are Liam's average and marginal tax rates on total taxable income?
A) $106,100, 33.68%, 39%, respectively
B) $122,850, 39.00%, 39%, respectively
C) $129,500, 34.53%, 39%, respectively
D) $139,250, 37.13%, 39%, respectively

Question

Quizplus · Accepted Answer

Liam's taxable income is $300,000 + $25,000 + $50,000 = $375,000. His tax liability is $106,100. His average tax rate is $106,100/$375,000 = 33.68%. His marginal tax rate is 39%.

Suppose That in Addition to the $300,000 of Taxable Income