Tax Rates. Latesha, a single taxpayer, had the following income and deductions for the

tax year 2015:

INCOME: Salary $ 80,000

Business Income 25,000

Interest income from bonds 10,000

Tax-exempt bond interest 5,000

TOTAL INCOME 120,000

DEDUCTIONS: Business expenses $ 9,500

Itemized deductions 20,000

Personal exemption 4,000

TOTAL DEDUCTIONS 33,500

a. Compute Lateshas taxable income and federal tax liability for 2015 (round to dollars).

b. Compute Lateshas marginal, average, and effective tax rates.

c. For tax planning purposes, which of the three rates in Part b is the most important?

(Hint:total economic income is $110,500)