Question
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
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 fiiler is $5,800. Use the rate schedule in 9-2 to compute the following:
- her tax
- her average effective tax rate
- Her average tax rate
- Her marginal tax rate
- Her accountant discovers a previously omitted personal deduction of $800. By how much does her federal tax liability fall with that addition?
- 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?
If taxable income is | Then tax is: |
$0-9,225 | 10% of the amount over $0 |
$9,225 - $37,450 | $922.50 + 15% of the amount over 9,225 |
$37,450 - $90,750 | $5,156.25 + 25% of the amount over $37,450 |
$90,750 - $189,300 | $18,481.25 + 28% of the amount over $90,750 |
$189,300 - $411,500 | $46,075 + 33% of the amount over $189,300 |
$411,500 - $413,200 | $119,401 + 35% of the amount over $411,500 |
$413,200 or more | !119,996.25 + 39.6% of the amount over $413,200 |
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