Chuck, a single taxpayer, earns $86,000 in taxable income and $20,000 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.)

Required:

1. If Chuck earns an additional $53,000 of taxable income, what is his marginal tax rate on this income?
2. What is his marginal rate if, instead, he had $53,000 of additional deductions?

2019 Tax Rate Schedules

Individuals

Schedule X-Single

If taxable income is over:	But not over:	The tax is:
$ 0	$ 9,700	10% of taxable income
$ 9,700	$ 39,475	$970 plus 12% of the excess over $9,700
$ 39,475	$ 84,200	$4,543 plus 22% of the excess over $39,475
$ 84,200	$160,725	$14,382.50 plus 24% of the excess over $84,200
$160,725	$204,100	$32,748.50 plus 32% of the excess over $160,725
$204,100	$510,300	$46,628.50 plus 35% of the excess over $204,100
$510,300		$153,798.50 plus 37% of the excess over $510,300