Chuck, a single taxpayer, earns $75,000 in taxable income and $10,000 in interest from an investment in City of Heflin bonds. (Use the U.S tax rate schedule.) Required:

1. How much federal tax will he owe?
2. What is his average tax rate?
3. What is his effective tax rate?
4. What is his current marginal tax rate
5. If Chuck earns an additional $40,000 of taxable income, what is his marginal tax rate on this income?
6. What is his marginal rate if, instead, he had $40,000 of additional deductions?

2020 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: The tax is: $ 0 $ 9,875 10% of taxable income $ 9,875 $ 40,125 $987.50 plus 12% of the excess over $9,875 $ 40,125 $ 85,525 $4,617.50 plus 22% of the excess over $40,125 $ 85,525 $163,300 $14,605.50 plus 24% of the excess over $85,525 $163,300 $207,350 $33,271.50 plus 32% of the excess over $163,300 $207,350 $518,400 $47,367.50 plus 35% of the excess over $207,350 $518,400 $156,235 plus 37% of the excess over $518,400