Question

What is the effective tax rate for an individual whose taxable income is $150,000 and owes $28,977.50 in taxes?

Option 1: 19.3%
Option 2: 20.3%
Option 3: 22.5%
Option 4: 24.2%

Answer 1

The effective tax rate for an individual with a taxable income of $150,000, who owes $28,977.50 in taxes, is calculated to be 19.3%, which corresponds to Option 1.

Step-by-step explanation:

The effective tax rate for an individual is calculated by dividing the total taxes paid by their taxable income. In the case of an individual with a taxable income of $150,000 and who owes $28,977.50 in taxes, their effective tax rate can be found using the following formula:

Effective Tax Rate = Total Taxes Paid / Taxable Income

Plugging in the values provided:

Effective Tax Rate = $28,977.50 / $150,000

Effective Tax Rate = 0.193183 or 19.3%

Therefore, the effective tax rate for this individual is 19.3%, which corresponds to Option 1.