Assume you are offered a job with a salary of $41,000 and a bonus of 7.5% based on your performance during the year. If you receive your full bonus at the end of the year, what is your total (gross or before tax) pay for the year?

Assume you are filing under single status. Using the income tax table provided below, answer the following questions.

What is your marginal tax rate? 22%

What is your average (effective) tax rate? First determine the actual tax withheld from your income. Use the income calculated in part 1.

a. Calculate your take-home pay using the pay in part 1.a. and the taxes calculated in part 1.b.ii. (ignore employment taxes)

Which is the relevant tax rate (marginal or average) as you consider whether or not you should work a second job to help you pay off your student loans more quickly? Why?