Chuck, a single taxpayer, earns $80,000 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. If Chuck earns an additional $40,580 of taxable income, what is his marginal tax rate on this income? What is his marginal rate if, instead, he had $40,580 of additional deductions?

2. Jorge and Anita, married taxpayers, earn $92,500 in taxable income and $65,000 in interest from an investment in City of Heflin bonds. Using the U.S. tax rate schedule for married filing jointly, how much federal tax will they owe? What is their average tax rate? What is their effective tax rate? What is their current marginal tax rate?