Maria is single and has a 2013 taxable income of $199,800 She also received $15,000 of tax-exempt income.Maria's effective tax rate is:

Question

Quizplus · Accepted Answer

To determine Maria's effective tax rate, calculate the total tax liability (federal income tax) divided by the taxable income plus tax-exempt income. Using the 2013 tax brackets and rates, her total tax liability would be $49,149.25.

[$17,675 + (0.28 x ($199,800 - $183,250))]

Her taxable income plus tax-exempt income is $214,800 ($199,800 + $15,000).

Therefore, her effective tax rate is:

$49,149.25 / $214,800 = 0.2287 or 22.87%, which rounds up to 23.3%.

The correct answer is B.

Maria Is Single and Has a 2013 Taxable Income of $199,800