Susan and Stan Britton are a married couple who file a joint income tax return,
ID: 2620278 • Letter: S
Question
Susan and Stan Britton are a married couple who file a joint income tax return, where the tax rates are based on the tax table 3.5. Assume that their taxable income this year was $281,000. Round your answers to two decimal places.
What is their federal tax liability?
$
What is their marginal tax rate?
%
What is their average tax rate?
Table 3.5 2015 Individual Tax Rates Single Individuals Plus This Percentage You Pay This Amount on the Base ofthe Bracket Average Tax If Your Taxable on the Excess over the Rate at Rate Top of Bracket Income Is Base MAA Up to S9,225 1 0.0% 15.0 25.0 28.0 33.0 35.0 39.6 10.0% 13.8 20.4 24.3 29.0 29.0 39.6 0 $9,225-S37,450 S37,450-$90,750 90,750-$189,750 S189,750-S411,500 $411,500-S$413,200 Over $413,200 922.50 5,156.25 18,481.25 46,075.25 119,401.25 119,996.25 Married Couples Filing Joint Returns You Pay This Amount on the Base of the Bracket Plus This Percentage on the Excess over the Base (Marginal Rate Average Tax If Your Taxable Income Is Up to $18,450 S18,450-$74,900 S74,900-S151,200 S151,200-$230,450 S230,450-$411,500 S411,500-$464,850 Over $464,850 Rate at Top of Bracket 10.0% 15.0 25.0 28.0 33.0 35.0 39.6 10.0% 13.8 19.4 22.4 27.1 28.0 39.6 0 1,845.00 10,312.50 29,387.50 51,577.50 111,324.00 129,996.50Explanation / Answer
What is their federal tax liability?
we look up the table correpsonding to joint returns filed by married couples where 281000 lies
it lies between 230450 and 411500
the base tax to be paid for 230450=51577.5
hence, total tax=51577.5+33%*(281000-230450)=68259
What is their marginal tax rate?
=tax rate that will be applicable if they earn 1 more dollar
=33%
What is their average tax rate?
=Total Tax/total income=68259/281000=24.2914591%
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