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Scot and Vidia, married taxpayers, earn $241,300 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S.
Scot and Vidia, married taxpayers, earn $241,300 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule for married filing jointly).
Required:
- If Scot and Vidia earn an additional $81,300 of taxable income, what is their marginal tax rate on this income?
- What is their marginal tax rate if, instead, they report an additional $81,300 in deductions?
Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)
If taxable income is over: | But not over: | The tax is: |
---|---|---|
$ 0 | $ 19,900 | 10% of taxable income |
$ 19,900 | $ 81,050 | $1,990 plus 12% of the excess over $19,900 |
$ 81,050 | $ 172,750 | $9,328 plus 22% of the excess over $81,050 |
$ 172,750 | $ 329,850 | $29,502 plus 24% of the excess over $172,750 |
$ 329,850 | $ 418,850 | $67,206 plus 32% of the excess over $329,850 |
$ 418,850 | $ 628,300 | $95,686 plus 35% of the excess over $418,850 |
$ 628,300 | $168,993.50 plus 37% of the excess over $628,300 |
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