Ms. Busch has gathered these data about her finances:

Salary 140,000

Taxable interest received 2,500

Municipal bond interest received 15,000

Total itemized deductions 8,000

The personal exemption is $3,700. The standard deduction for a single filer is $5,800. Use the rate schedule in Figure 92 to compute the following:

a.Her tax

b.Her average effective tax rate

c.Her average tax rate

d.Her marginal tax rate

e.Her accountant discovers a previously omitted personal deduction of $800. By how much does her federal tax liability fall with that addition?

f.Amazingly enough, the accountant now discovers a $250 credit omitted from previous calculations (but after discovering the $800 in part e). By how much does her federal tax liability fall because of this credit?

Figure 92 Federal Rate Schedule for 2011

Single Filers

If Taxable Income Is:Then Tax Is:

$0 - 8,500 10% of the amount over $0

8,500 - 34,500 $850 + 15% of the amount over $8,500

34,500 - 83,600 4,750 + 25% of the amount over $34,500

83,600 - 174,400 17,025 + 28% of the amount over $83,600

174,400 - 379,150 42,449 + 33% of the amount over $174,400

379,150 and over 110,016.50 + 35% of the amount over $379,150

**PLEASE SHOW THE WORK/EXCEL FORMULAS ON HOW YOU GET YOUR ANSWERS**