Question

- Gross pay: $38,550; married,
2 dependents; state income tax rate:
3 percent.

Answer 1

Explanation:

This is 0% of your total income of $0. 0% would also be your average tax rate. Your income puts you in the 0% tax bracket. At higher incomes, exemptions, 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 0% marginal tax rate.