Mr. Hoosier has gathered all these data about his finances.

Salary $159,000

Taxable interest $5,600

Municipal Bond interest $15,000

Total Itemized deductions $9,500

The personal exemption is $4700. The standardized deduction for a single filer is 5000.

Single Filer

If Taxable Income is Then tax is:

0-8000 10% of the amount over 0

8000- 35,000 800 + 15% of the amount over 8000

35000- 55,000 4850 + 20% of the amount over 35000

55000- 150,000 8850 + 30% of the amount over 55000

150000 – 200000 37350 + 35% of the amount over 150000

200000 and over 54850 + 40% of the amount over 200000

Married filing jointly:

If Taxable Income is Then tax is:

0-8000 10% of the amount over 0

8000- 35,000 800 + 18% of the amount over 8000

35000- 55,000 4850 + 22% of the amount over 35000

55000- 150,000 8850 + 35% of the amount over 55000

150000 – 200000 37350 + 37% of the amount over 150000

200000 and over 54850 + 45% of the amount over 200000

Please answer each question and you must show your work

1.What is his tax owed?

2.What is his average effective tax rate?

3.What is his average tax rate?

4.What is his marginal tax rate?

5.Assume he discovers that he is eligible for a 600 tax deduction. How much does his tax liability fall with that addition?

6.Now he discovers that he is eligible for a $600 tax credit. How much does his tax liability fall due to this credit?