Scot and Vidia married taxpayers earn 62500 in taxable incom

Scot and Vidia, married taxpayers, earn $62,500 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule). (Do not round intermediate calculations. Round your answer to 2 decimal places.)

\"MUST USE 2017 TAX RATE SCHEDULE\"!!!!!!!!

A) If Scot and Vidia earn an additional $19,500 of taxable income, what is their marginal tax rate on this income?

B) How would your answer differ if they, instead, had $19,500 of additional deductions? The marginal tax rate is_____%

Solution

Ans 1 Presently they are in the slab 15% as per uS tax table 2016 If additional $19500 is earned They will go another high slab as there I ncome is above $75300 hence with any increase in incokme it will be taxable at the rate of 25% Marginal tax rate is 25% Ans 2 If it’s a deduction of $19500 than their income will be in the range of 15% and any additional incraese in income will be yaxed at marginal rate of 15%