Jorge and Anita, married taxpayers, earn $147,500 in taxable income and $60,000 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule for married filing jointly).

Required:

1. If Jorge and Anita earn an additional $110,000 of taxable income, what is their marginal tax rate on this income?
2. What is their marginal rate if, instead, they report an additional $110,000 in deductions?

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

6]

Marc, a single taxpayer, earns $45,000 in taxable income and $1,300 in interest from an investment in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2018, how much federal tax will he owe? (Use tax rate schedule)

Multiple Choice

• $9,900.00

• $6,939.50

• $5,839.50

• $3,153.50

• None of the choices are correct.

7]

Manny, a single taxpayer, earns $82,500 per year in taxable income and an additional $10,250 per year in city of Boston bonds.

What is Manny's current marginal tax rate for year 2018? (Use Tax rate schedule)

Multiple Choice

• 17.35%

• 26.40%

• 14.90%

• 18.01%

• None of the choices are correct.

8]

Leonardo, who is married but files separately, earns $90,000 of taxable income. He also has $8,750 in city of Tulsa bonds. His wife, Theresa, earns $50,000 of taxable income.

If Leonardo and his wife file married filing jointly in 2018, what would be their average tax rate? (Use tax rate schedule)

Multiple Choice

• 12.45%

• 22.45%

• 16.20%

• 14.57%

• None of the choices are correct.

9]

If Susie earns $375,000 in taxable income, how much tax will she pay as a single taxpayer for year 2018? (Use tax rate schedule)

Multiple Choice

• $80,629.00

• $141,250.00

• $106,939.5

• $110,939.50

• None of the choices are correct.

10]

Curtis invests $275,000 in a city of Athens bond that pays 4.75% interest. Alternatively, Curtis could have invested the $275,000 in a bond recently issued by Initech, Inc. that pays 6.50% interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 24%. How much explicit tax would Curtis incur on interest earned on the Initech, Inc. bond?

Multiple Choice

• $13,985

• $4,290

• $3,135

• $9,228

• None of the choices are correct.

10]