Question 1

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

Chuck, a single taxpayer, earns $75,600 in taxable income and $10,700 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule.)

Required:

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

a. Marginal Tax Rate =

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

b. Marginal Tax Rate =

Note: For all requirements, do not round intermediate calculations. Round percentage answers to 2 decimal places.