Table 18-6

Table 18-6 shows the income tax brackets and tax rates for single taxpayers in Calpernia.
-Refer to Table 18-6.Sasha is a single taxpayer with an income of $60,000.What is his marginal tax rate and what is his average tax rate?
A)marginal tax rate = 38%; average tax rate = 23%
B)marginal tax rate = 17%; average tax rate = 21%
C)marginal tax rate = 38%; average tax rate = 24%
D)marginal tax rate = 23%; average tax rate = 38%

Question

Table 18-6
  
Table 18-6 shows the income tax brackets and tax rates for single taxpayers in Calpernia.
-Refer to Table 18-6.Sasha is a single taxpayer with an income of $60,000.What is his marginal tax rate and what is his average tax rate?
A)marginal tax rate = 38%; average tax rate = 23% 
B)marginal tax rate = 17%; average tax rate = 21% 
C)marginal tax rate = 38%; average tax rate = 24% 
D)marginal tax rate = 23%; average tax rate = 38%

Quizplus · Accepted Answer

According to Table 18-6, the marginal tax rate for an income of $60,000 is 38%. To calculate the average tax rate, we need to find the total amount of tax paid by dividing the tax amount by the income. 
For $60,000 of income, the tax amount is: 
- 10% on the first $9,875 = $987.50 
- 12% on the amount between $9,876 and $40,125 = $3,102 
- 22% on the amount between $40,126 and $85,525 = $11,064.10 
- 24% on the amount between $85,526 and $163,300 = $0 
Total tax amount = $15,153.60 
Average tax rate = ($15,153.60 / $60,000) x 100% = 25.26% 
Therefore, the marginal tax rate is 38% and the average tax rate is 25.26%, which is closest to option C.

Table 18-6 Table 18-6 Shows the Income Tax Brackets and Tax Rates