Question

Aiden has a gross income of $63,000 and takes the standard deduction. Their total taxes due are $6,847.50.

What is their taxable income?
What is their marginal tax rate?
What is their effective tax rate? Round to the nearest hundredth of a percent.

Answer 1

If their total taxes due are $6,847.50, their taxable income is: $56,152.2, marginal rate is 22% and the effective tax rate is 10.87%.

Taxable income

a. Taxable income:

Taxable income=Gross income - Total taxes due

Taxable income=$63,000-$6,847.50

Taxable income=$56,152.5

b. The marginal tax rate for taxable income  under the income bracket of of $40,526 to $86,375 is 22%.

c. Effective tax rate:

Effective tax rate = Total taxes due/ Taxable income×100

Effective tax rate =$6,847.50/$56,152.5×100

Effective tax rate =10.869%

Effective tax rate =10.87% (Approximately)

Inconclusion if their total taxes due are $6,847.50, their taxable income is: $56,152.2, marginal rate is 22% and the effective tax rate is 10.87%.

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