Final answer:
The marginal tax rate is the tax rate applied to the last dollar of taxable income. In this example, Tameka's taxable income of $98,675 is taxed at different rates for different income brackets. Her total tax liability is $17,761.50 and her marginal tax rate is 24%.
Step-by-step explanation:
The marginal tax rate is the tax rate applied to the last dollar of taxable income. It represents the percentage of an individual's income that is taxed at a specific rate.
In the given example, Tameka has taxable income of $98,675. The tax rates are applied in different brackets: 10% for income up to $9,875, 12% for income between $9,875 and $40,125, 22% for income between $40,125 and $85,525, and 24% for income between $85,525 and $98,675.
To calculate Tameka's total tax liability, we will first determine the tax amount for each bracket and then add them together.
Step 1: Calculate the tax for the first bracket: $9,875 x 10% = $987.50
Step 2: Calculate the tax for the second bracket: ($40,125 - $9,875) x 12% = $3,630.00
Step 3: Calculate the tax for the third bracket: ($85,525 - $40,125) x 22% = $9,988.00
Step 4: Calculate the tax for the fourth bracket: ($98,675 - $85,525) x 24% = $3,156.00
Step 5: Add the tax amounts from each bracket: $987.50 + $3,630.00 + $9,988.00 + $3,156.00 = $17,761.50
Therefore, Tameka's total tax liability is $17,761.50.
Her marginal tax rate is determined by the tax rate applied to her last dollar of taxable income, which is 24%.