Chuck, a single taxpayer, earns $87,500 in taxable income and $2,500 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.)

Required:

1. If Chuck earns an additional $5,000 of taxable income, what is his marginal tax rate on this income?
2. What is his marginal rate if, instead, he had $5,000 of additional deductions?

(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.)

2018 Tax Rate Schedules Individuals Schedule Z-Head of Household If taxable income But not over: The tax is: If taxable incois But not over: The tax is: is over: over 0 $ 9.525 | 10% of taxable income S 13.600 | 10% of taxable income $ 38700 | $952.50 plus 12% of S 13,600 $ 51.300 | $1.360 plus 12% of S 9,525 the excess over $9,525 the excess over 13.600 S 38.700 $ $2.500 | $4.453.50 plus 22% of S 51.800 $ S2.500 | S5944 plus 22% of the excess over the excess over S33,700 S51,800 $157,500 |$14,039,50 plus 24% S S2.500 SI 57.500 | S 12.698 plus 24% of of the excess over the excess over $52,500 $157,500 S157,500 | S30.698 plus 32% of $200.000 | S32.OS9.50 plus 32% $200,000 of the excess over $157.500 the excess over $157.500 | S44, 298 plus 35% of $200,000 $500,000 | $45.639.50 plus 35% of the excess over $200,000 500,000 the excess over $200.000 $149.293 plus 37% of the excess over 500,000 $500,000 $150.689.50 plus 37% of the excess over 500,000 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) Schedule Y-2-Married Filing Separately The tax is: If taxable income But not over: If taxable incoeis But not over: The tax is: is over: over | 10% of taxable income 0 $ 19,050 $ 9,525 | 10% of taxable income S 19.050 $ 77.400 | $1,905 plus 12% of S 9.525 $ 38.700 | S952.50 plus 12% of the excess over $9,525 the excess over S19,050 S 77.400 $ 165.000 | $S.907 plus 22% of S 33.700 S S2.500 | S4-453.50 plus 22% of the excess over the excess over $77,400 33,700 $31 5.000 | S2SI 79 plus 24% of $165.000 $157,500 | SI4.0S9.50 plus 24% of the excess over $82,500 the excess over S165.000 | S64, 179 plus 32% of S157,500 $315,000 $400,000 $200,000 | S32.089 50 plus 32% of the excess over 157.500 the excess over 315.000 $600,000 | $91.379 plus 35% of $200,000 $400,000 $300,000 | S45.689 50 plus 35% of the excess over 200.000 the excess over $600.000 $161.379 plus 37% of the excess over 600,000 80.689.50 plus 37% of the excess over 300,000