Question

if your salary is $42,000 and your federal income taxes are 10% of your salary, how much money will you owe this year in federal taxes? assume you have no deductions.

Answer 1

Your taxes are estimated at -$5,925.

Explanation:

This is 0% of your total income of $42,000. 0% would also be your average tax rate. Your income puts you in the 12% tax bracket. At higher incomes many deductions and many credits are phased out. This increases your tax bill and your marginal tax rate. With these phase outs, adding $1,000 to your income would result in a -15% marginal tax rate.