Leonardo, who is married but files separately, earns $80,000 of taxable income. He also has $15,000 in city of Tulsa bonds. His wife, Theresa, earns $50,000 of taxable income. If Leonardo instead had $30,000 of additional tax deductions for year 2018, his marginal tax rate (rounded) on the deductions would be: (Use tax rate schedule)

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John Rasmussen

2 November, 21:47

Leonardo, who is married but files separately, earns $80,000 of taxable income. He also has $15,000 in city of Tulsa bonds. His wife, Theresa, earns $50,000 of taxable income. If Leonardo instead had $30,000 of additional tax deductions for year 2018, his marginal tax rate (rounded) on the deductions would be: (Use tax rate schedule)

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Isaiah Leonard · Answer 1

tax rate applicable for the year 2017 for married people filing separately is 28% + 14693.75 for taxable income pver $75600.

total tax = $80000 + $30000 = $110000

marginal rate = (total tax at $110000 - total tax at $80000) / ($110000 - $80000)

= [ (28% (110000 - 75600) + 14693.75) - 28% (80000 - 75600) + 14693.75) ] / (110000 - 80000)

= ($24325.75 - 15925.75) / (110000 - 80000)

= 28%