Question

Adam Ant lives in the country of Petertopia, which has a tax rate of 5% on the first $20,000 in taxable income, 10% on the next $40,000 in taxable income, and 15% on all taxable income above $60,000. Petertopia allows a standard deduction of $12,200 for single taxfilers, and $24,400 for married taxfilers. There are no other tax deductions or credits available. Adam has gross income of $35,000. As a single person, he takes a standard deduction of $12,200. Adam's taxable income is $________ his marginal tax rate is ______% and his total taxes due are $ ________(Please only enter numbers in the blanks. Round your answers to 2 decimal places if necessary.)

Answer 1

Adam Ant

Adam's taxable income is $__22,800__ his marginal tax rate is __3.66__% and his total taxes due are $ ___$1,280__

Step-by-step explanation:

a) Data and Calculations:

Tax rates:

5% on the first $20,000

10% on the next $40,000

15% on all taxable income above $60,000

Standard deduction = $12,210 for single taxpayers

Standard deduction = $24,400 for married taxpayers

Adam's Gross income = $35,000

Standard deduction = 12,200

Taxable income = $22,800

Tax due:

5% on the first ($20,000) = $1,000

10% on the next $40,000 2,800 = 280

Total taxes due = $1,280

Marginal rate = $1,280/$35,000 * 100 = 3.66%