What would be the marginal and average tax rates for a married couple with taxab

Question

What would be the marginal and average tax rates for a married couple with taxable income of $90,600? For an unmarried taxpayer with the same income? Use Table 3.7. (Do not round intermediate calculations. Enter the marginal tax rate as a percent rounded to 1 decimal place. Enter the average tax rate as a percent rounded to 1 decimal place.)

TABLE 3.7 Personal tax rates, 2016 Taxable Income ($) Married Taxpayers Filing Joint Returns Tax Rate (%) 10.0 15.0 25.0 28.0 33.0 35.0 39.6 Single Taxpayers 0-9,275 0-18,550 9,276-37,650 37,651-91,150 91,151-190,150 190,151-413,350 413,351-415,050 415,051 and above 18,551-75,300 75,301-151,900 151,901-231,450 231,451-413,350 413,351-466,950 466,951 and above 4 Losses can be carried back for a maximum of 3 years and forward for up to 15 years

Explanation / Answer

Joint Couple: 10%*18550+15%*(75300-18551)+25%*(90600-75301)=14192.1

Average Tax rate=14192.1/90600=15.66%

Marginal Tax rate=25%

Unmarried: 10%*9275+15%*(37650-9276)+25%*(90600-37651)=18420.85

Average Tax rate=18420.85/90600=20.33%

Marginal Tax rate=25%

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