Question
Emily, a single taxpayer, has determined her taxable income is $76,000. She also received interest from an investment in City bonds of $13,000 (municipal bonds),
Emily, a single taxpayer, has determined her taxable income is $76,000. She also received interest from an investment in City bonds of $13,000 (municipal bonds), which are considered non-taxable for federal purposes.
(a) Using the U.S. tax rate schedule for year 2019, how much federal tax will Emily owe given the above information?
(b) What is her average tax rate?
(c) What is her effective tax rate?
(d) What is her current marginal tax rate?
(e) If Emily earned an additional $27,000 of taxable income, what would her marginal tax rate on this additional income only be? (Round the tax rates to 2 decimal places.)
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