eBook Problem Walk-Through

Susan and Stan Britton are a married couple who file a joint income tax return, where the tax rates are based on the tax table 3.5. Assume that their taxable income this year was $256,000. Do not round intermediate calculation.

1. What is their federal tax liability? Round your answer to the nearest dollar.

   $

2. What is their marginal tax rate? Round your answer to the nearest whole number.

   %

3. What is their average tax rate? Round your answer to two decimal places.

   %

Table 3.5 2018 Individual Tax Rates Single Individuals If Your Taxable Income Is Up to $9,525 $9,525 - $38,700 $38,700 - $82,500 $82,500 - $157,500 $157,500 - $200,000 $200,000 - $500,000 Over $500,000 You Pay This Amount Plus This Percentage on Average Tax on the base of the the Excess over the Base Rate at Top of Bracket (Marginal Rate) Bracket $0.00 10.0% 10.0% 952.50 12.0% 11.5% 4,453.50 22.0% 14,089.50 24.0% 20.4% 32,089.50 32.0% 22.8% 45,689.50 35.0% 30.1% 150,689.50 37.0% 37.0% 17.1% Married couples Filing Joint Returns If Your Taxable Income is Up to $19,050 $19,050 - $77,400 $77,400 - $165,000 $165,000 - $315,000 $315,000 - $400,000 $400,000 - $600,000 Over $600,000 You Pay This Amount Plus This Percentage on Average Tax on the Base of the the Excess over the Base Rate at Top of Bracket (Marginal Rate) Bracket $0.00 10.0% 10.0% 1,905.00 12.0% 11.5% 8,907.00 22.0% 17.1% 28,179.00 24.0% 20.4% 64,179.00 32.0% 22.8% 91,379.00 35.0% 26.9% 161,379.00 37.0% 37.0%