Problem $1-35($LO $1-3)($Algo$)$

Chuck, a single taxpayer, earns $$75,400$ in taxable income and $$10,400$ in interest from an investment in City of Heflin bonds. $($Use the U$.$S$.$ tax rate schedule.$)$

Required:

If Chuck earns an additional $$40,000$ of taxable income, what is his marginal tax rate on this income?

What is his marginal rate if$,$ instead, he had $$40,000$ of additional deductions?

Note: For all requirements, do not round intermediate calculations. Round percentage answe$2023$ Tax Rate Schedules

Individuals

Schedule X$-$Single

If taxable income is over: But not over: The tax is:

$ $0$ $ $11,00010\%$ of taxable income

$ $11,000$ $ $44,725$ $$1,100$ plus $12\%$ of the excess over $$11,000$

$ $44,725$ $ $95,375$ $$5,147$ plus $22\%$ of the excess over $$44,725$

$ $95,375$ $ $182,100$ $$16,290$ plus $24\%$ of the excess over $$95,375$

$ $182,100$ $ $231,250$ $$37,104$ plus $32\%$ of the excess over $$182,100$

$ $231,250$ $ $578,125$ $$52,832$ plus $35\%$ of the excess over $$231,250$

$ $578,125$ $$174,238\mathrm{.}25$ plus $37\%$ of the excess over $$578,125$

Schedule Y$-1-$Married Filing Jointly or Qualifying surviving spouse

If taxable income is over: But not over: The tax is:

$ $0$ $ $22,00010\%$ of taxable income

$ $22,000$ $ $89,450$ $$2,200$ plus $12\%$ of the excess over $$22,000$

$ $89,450$ $ $190,750$ $$10,294$ plus $22\%$ of the excess over $$89,450$

$ $190,750$ $ $364,200$ $$32,580$ plus $24\%$ of the excess over $$190,750$

$ $364,200$ $ $462,500$ $$74,208$ plus $32\%$ of the excess over $$364,200$

$ $462,500$ $ $693,750$ $$105,664$ plus $35\%$ of the excess over $$462,500$

$ $693,750$ $$186,601\mathrm{.}5$ plus $37\%$ of the excess over $$693,750$

Schedule Z$-$Head of Household

If taxable income is over: But not over: The tax is:

$ $0$ $ $15,70010\%$ of taxable income

$ $15,700$ $ $59,850$ $$1,570$ plus $12\%$ of the excess over $$15,700$

$ $59,850$ $ $95,350$ $$6,868$ plus $22\%$ of the excess over $$59,850$

$ $95,350$ $ $182,100$ $$14,678$ plus $24\%$ of the excess over $$95,350$

$ $182,100$ $ $231,250$ $$35,498$ plus $32\%$ of the excess over $$182,100$

$ $231,250$ $ $578,100$ $$51,226$ plus $35\%$ of the excess over $$231,250$

$ $578,100$ $$172,623\mathrm{.}5$ plus $37\%$ of the excess over $$578,100$

Schedule Y$-2-$Married Filing Separately

If taxable income is over: But not over: The tax is:

$ $0$ $ $11,00010\%$ of taxable income

$ $11,000$ $ $44,725$ $$1,100$ plus $12\%$ of the excess over $$11,000$

$ $44,725$ $ $95,375$ $$5,147$ plus $22\%$ of the excess over $$44,725$

$ $95,375$ $ $182,100$ $$16,290$ plus $24\%$ of the excess over $$95,375$

$ $182,100$ $ $231,250$ $$37,104$ plus $32\%$ of the excess over $$182,100$

$ $231,250$ $ $346,875$ $$52,832$ plus $35\%$ of the excess over $$231,250$

$ $346,875$ $$93,300\mathrm{.}75$ plus $37\%$ of the excess over $$346,875$rs to $2$ decimal places.