Leonardo earns $80,000 of taxable income.He also has $15,000 in city of Tulsa bonds.His wife,Theresa,earns $50,000 of taxable income.If Leonardo and his wife file married filing jointly in 2013,what would be their average tax rate (rounded) ?
A)15.00%
B)25.00%
C)18.74%
D)23.88%
E)None of these

Question

Quizplus · Accepted Answer

To calculate the average tax rate, first determine the total taxable income, which is $80,000 + $50,000 = $130,000. The city of Tulsa bonds are not taxable. For 2013, the tax brackets for married filing jointly are used to calculate the total tax. The average tax rate is then the total tax divided by the total taxable income. The calculation results in an average tax rate of approximately 18.74%.

Leonardo Earns $80,000 of Taxable Income