Answer to Question #90690 in Finance for Andy

Question #90690
Consider an individual who earns $100,000, pays $7,000 in child care expenses for one child, pays the maximum ($26,010) in Registered Pension Plan (RPP) contributions, makes charitable donations of $200 (15 percent credit), and pays $20,000 in medical expenses. Medical expenses in excess of 3 percent of net income are deductible at 20 percent. The statutory marginal tax rate is 17 percent.
What is the federal tax payable? What is the individual’s actual (effective) marginal tax rate?
1
Expert's answer
2019-06-12T11:11:09-0400

the federal tax payable = ( 100000 - 7000 - 26010 - ( 200 - 200*15/100) - 20000 *20/100 ) *17/100 = 62820 *17/100 = 10679.4

The effective tax rate is the average tax rate paid by a corporation or an individual.

An individual's effective tax rate is calculated by dividing the "Total Tax" on "Taxable Income."

An individual's effective tax rate = 10679.4 / 62820 = 0.17


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

Ask Your question

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS