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Taxes paid for a given income level Suppose that Eric is preparing to file his taxes. He is single and currently lives in Chicago. Eric
Taxes paid for a given income level
Suppose that Eric is preparing to file his taxes. He is single and currently lives in Chicago. Eric earned $ in taxable income in He reviews the following table, which shows the IRS tax rates for a single taxpayer in
tableOn Annual Taxable Income...,tableThe Tax Rate IsPercentUp to $From $ to $From $ to $From $ to $From $ to $From $ to $Over $
Based on the IRS table, Eric calculates that his marginal tax rate is when his annual taxable income is $
Eric calculates that he owes in income taxes for
Eric then calculates that his average tax rate is based on the annual income level and the amount of taxes he owes for
After figuring out what he owes in taxes in Eric decides to ask an accountant for tax advice. The accountant claims that he has found a legal way to shelter $ of taxable income from the federal government.
The maximum amount that Eric is willing to pay to learn this strategy and reduce his taxable income by $ is Hint: Sheltering some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has $ in taxable income and shelters $ pays income tax on only $
Blank options: $$$$$ $$$$ Please help with each part
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