Tax Rates. Latesha, a single taxpayer, had the following income and deductions for the tax year 2023:

a. Compute Latesha’s taxable income and federal tax liability for 2023 (round to dollars and ignore the qualified business income deduction and self-employment taxes for this problem).

b. Compute Latesha’s marginal, average, and effective tax rates.

c. For tax planning purposes, which of the three rates in Part b is the most important?

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INCOME: Salary Business income $100,000 25,000 Interest income from taxable bonds Interest income from tax-exempt bonds TOTAL INCOME DEDUCTIONS: Business expenses Itemized deductions TOTAL DEDUCTIONS 10,000 5,000 $140,000 $ 9,500 20,000 $ 29,500