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Posted on Aug 28, 2024

Daze, a Heads of Household taxpayer, earns $120,000 in taxable income. He also received tax exempt interest income, $10,000 from Municipal Bonds. Using the U.S.

Daze, a Heads of Household taxpayer, earns $120,000 in taxable income. He also received tax exempt interest income, $10,000 from Municipal Bonds. Using the U.S. tax rate schedule for year 2019, (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? (Round the tax rates to 2 decimal places, e.g., .12345 as 12.35%) image text in transcribed

2019 Tax Rate Schedules Individuals Schedule X-Single Schedule Z-Head of Household If taxable income is over: But not over: If taxable income is over: But not over: The tax is: The tax is: $ $ 0 9,700 $ 9,700 $ 39,475 $ 0 $ 13,850 $ 13,850 $ 52,850 $ 39,475 $ 84,200 $ 52,850 $ 84,200 $ 84,200 $160,725 $ 84,200 $160,700 10% of taxable income $970 plus 12% of the excess over $9,700 $4,543 plus 22% of the excess over $39,475 $14,382.50 plus 24% of the excess over $84,200 $32.748.50 plus 32% of the excess over $160,725 $46,628.50 plus 35% of the excess over $204,100 $153,798.50 plus 37% of the excess over $510,300 10% of taxable income $1,385 plus 12% of the excess Over $13,850 $6,065 plus 22% of the excess over $52,850 $12.962 plus 24% of the excess over $84,200 $31,322 plus 32% of the excess over $160,700 $45,210 plus 35% of the excess over $204,100 $152,380 plus 37% of the excess over $510,300 $160,725 $204,100 $160,700 $204,100 $204,100 $510,300 $204,100 $510,300 $510,300 - $510,300 - Schedule Y-2-Married Filing Separately Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: If taxable income is over: But not over: The tax is: But not over: The tax is: $ $ 0 9,700 $ 9,700 $ 39,475 $ 0 $ 19,400 $ 19,400 $ 78,950 $ 39,475 $ 84,200 $ 78,950 $168,400 $ 84,200 $160,725 $168,400 $321,450 10% of taxable income $1,940 plus 12% of the excess over $19,400 $9,086 plus 22% of the excess over $78,950 $28,765 plus 24% of the excess over $168,400 $65,497 plus 32% of the excess over $321,450 $93,257 plus 35% of the excess over $408,200 $164,709.50 plus 37% of the excess over $612,350 10% of taxable income $970 plus 12% of the excess over $9,700 $4,543 plus 22% of the excess over $39,475 $14,382.50 plus 24% of the excess over $84,200 $32,748.50 plus 32% of the excess over $160,725 $46,628.50 plus 35% of the excess over $204,100 $82,354.75 plus 37% of the excess over $306,175 $160,725 $204,100 $321,450 $408,200 $204,100 $306,175 $408,200 $612,350 $306,175 - $612.350 - Estates and Trusts If taxable income is over: But not over: The tax is: $ 0 $ 2,600 $2,600 S 9.300 $ 9,300 $12,750 10% of taxable income $260 plus 24% of the excess over $2,600 $1,868 plus 35% of the excess over $9,300 $3,075.50 plus 37% of the excess over $12,750 $12,750 Tax Rates for Net Capital Gains and Qualified Dividends Rate* Taxable Income Married Filing Jointly Married Filing Separately Head of Household Single Trusts and Estates 0% 15% 20% $0 - $78,750 $78,751 - $488,850 $488,851+ $0 - $39,375 $39,376 - $244,425 $244,426+ $0 - $39,375 $39,376 - $434,550 $434,551+ $0 - $52,750 $52,751 - $461,700 $461,701+ $0 - $2,650 $2,651 - $12,950 $12,951+ * This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified divi- dends are included in taxable income last for this purpose). Basic Standard Deduction Amounts* 2018 2019 Amount Filing Status Amount Amount of Each Additional Standard Deduction for Taxpayers Who Are Age 65 or Blind 2018 2019 Amount Amount Married taxpayers $1,300 $1,300 Single taxpayer or head of household $1,600 $1,650 Married Filing Jointly Qualifying Widow or Widower Married Filing Separately Head of Household Single $24,000 $24,000 $12.000 $18,000 $12,000 $24,400 $24,400 $12,200 $18,350 $12,200 Exemption Amount *For individuals claimed as a dependent on another return, the 2019 standard deduction is the greater of (1) $1,100 or (2) $350 plus earned income not to exceed the standard deduction amount of those who are not dependents. 2018 2019 $4,150 $4,200* *Used for qualifying relative gross income test. Corporations Taxable Income Rate 21% All 2019 Tax Rate Schedules Individuals Schedule X-Single Schedule Z-Head of Household If taxable income is over: But not over: If taxable income is over: But not over: The tax is: The tax is: $ $ 0 9,700 $ 9,700 $ 39,475 $ 0 $ 13,850 $ 13,850 $ 52,850 $ 39,475 $ 84,200 $ 52,850 $ 84,200 $ 84,200 $160,725 $ 84,200 $160,700 10% of taxable income $970 plus 12% of the excess over $9,700 $4,543 plus 22% of the excess over $39,475 $14,382.50 plus 24% of the excess over $84,200 $32.748.50 plus 32% of the excess over $160,725 $46,628.50 plus 35% of the excess over $204,100 $153,798.50 plus 37% of the excess over $510,300 10% of taxable income $1,385 plus 12% of the excess Over $13,850 $6,065 plus 22% of the excess over $52,850 $12.962 plus 24% of the excess over $84,200 $31,322 plus 32% of the excess over $160,700 $45,210 plus 35% of the excess over $204,100 $152,380 plus 37% of the excess over $510,300 $160,725 $204,100 $160,700 $204,100 $204,100 $510,300 $204,100 $510,300 $510,300 - $510,300 - Schedule Y-2-Married Filing Separately Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: If taxable income is over: But not over: The tax is: But not over: The tax is: $ $ 0 9,700 $ 9,700 $ 39,475 $ 0 $ 19,400 $ 19,400 $ 78,950 $ 39,475 $ 84,200 $ 78,950 $168,400 $ 84,200 $160,725 $168,400 $321,450 10% of taxable income $1,940 plus 12% of the excess over $19,400 $9,086 plus 22% of the excess over $78,950 $28,765 plus 24% of the excess over $168,400 $65,497 plus 32% of the excess over $321,450 $93,257 plus 35% of the excess over $408,200 $164,709.50 plus 37% of the excess over $612,350 10% of taxable income $970 plus 12% of the excess over $9,700 $4,543 plus 22% of the excess over $39,475 $14,382.50 plus 24% of the excess over $84,200 $32,748.50 plus 32% of the excess over $160,725 $46,628.50 plus 35% of the excess over $204,100 $82,354.75 plus 37% of the excess over $306,175 $160,725 $204,100 $321,450 $408,200 $204,100 $306,175 $408,200 $612,350 $306,175 - $612.350 - Estates and Trusts If taxable income is over: But not over: The tax is: $ 0 $ 2,600 $2,600 S 9.300 $ 9,300 $12,750 10% of taxable income $260 plus 24% of the excess over $2,600 $1,868 plus 35% of the excess over $9,300 $3,075.50 plus 37% of the excess over $12,750 $12,750 Tax Rates for Net Capital Gains and Qualified Dividends Rate* Taxable Income Married Filing Jointly Married Filing Separately Head of Household Single Trusts and Estates 0% 15% 20% $0 - $78,750 $78,751 - $488,850 $488,851+ $0 - $39,375 $39,376 - $244,425 $244,426+ $0 - $39,375 $39,376 - $434,550 $434,551+ $0 - $52,750 $52,751 - $461,700 $461,701+ $0 - $2,650 $2,651 - $12,950 $12,951+ * This rate applies to the net capital gains and qualified dividends that fall within the range of taxable income specified in the table (net capital gains and qualified divi- dends are included in taxable income last for this purpose). Basic Standard Deduction Amounts* 2018 2019 Amount Filing Status Amount Amount of Each Additional Standard Deduction for Taxpayers Who Are Age 65 or Blind 2018 2019 Amount Amount Married taxpayers $1,300 $1,300 Single taxpayer or head of household $1,600 $1,650 Married Filing Jointly Qualifying Widow or Widower Married Filing Separately Head of Household Single $24,000 $24,000 $12.000 $18,000 $12,000 $24,400 $24,400 $12,200 $18,350 $12,200 Exemption Amount *For individuals claimed as a dependent on another return, the 2019 standard deduction is the greater of (1) $1,100 or (2) $350 plus earned income not to exceed the standard deduction amount of those who are not dependents. 2018 2019 $4,150 $4,200* *Used for qualifying relative gross income test. Corporations Taxable Income Rate 21% All