Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in

interest from an investment in city of Birmingham Bonds. Using the U. S.

tax rate schedule for year 2014, how much federal tax will he owe?

A. $15,000.00

B. $12,375.00

C. $10,856.25

D. $9,412.50

E. None of these

Federal tax = $10,856.25

Explanation:

Given:

Tax rate schedule for year 2014.

Income between $36,900 - $89,350

$5,081.25 + 25% over $36,900

Total income = $60,000

Computation:

So, Income between $36,900 - $89,350

Federal tax = $5,081.25 + 25% ($60,000 - $36,900)

Federal tax = $5,081.25 + 25% ($23,100)

Federal tax = $5,081.25 + 0.25 ($23,100)

Federal tax = $5,081.25 + $5,775

Federal tax = $10,856.25