ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM | FREE SOLVED ANSWERS
Xavier is single and has taxable income of $70,725. His marginal tax rate is:
Use the appropriate tax tables or tax rate schedules.
Xavier is single and has taxable income of $70,725. His marginal tax rate is:
Use the appropriate tax tables or tax rate schedules.
Multiple Choice
a. 22%
b. 15%
c. 12%.
d. 10%.
Correct Answer: A 22%
Step 1: Understand Marginal Tax Rate
The marginal tax rate is the tax rate applied to the last dollar of income earned. To determine it, we need to find the tax bracket that the taxpayer’s income falls into.
Step 2: Identify the relevant tax tables or schedules
Since the problem asks to use appropriate tax tables or schedules, we need to find the tax brackets for single filers for the relevant tax year (which is not specified, so we’ll assume a recent year, e.g., 2023 or 2024, as the options provided are common tax rates).
Step 3: Locate the income within the tax brackets
For a single filer with a taxable income of $70,725, we need to find which tax bracket this income falls into. Looking at the 2023 or 2024 tax brackets for single filers:
- 10% for income up to $11,600
- 12% for income between $11,601 and $47,150
- 22% for income between $47,151 and $100,525
Xavier’s taxable income of $70,725 falls within the 22% tax bracket, as it is greater than $47,151 but less than $100,525.
Answer:
The correct answer is 22%.