Question & Answer: AP 4.4 You are in the 25 percent marginal tax bracket. What is the marginal tax benefit of each of the following: Exclude commas from your response Attempt…..

AP 4.4 You are in the 25 percent marginal tax bracket. What is the marginal tax benefit of each of the following: Exclude commas from your response Attempt : 1 of 3 | Points Available: 2 Q1.a: Additional itemized deduction of $200 □Mark for Review Confidence 四四四四 Submit Part Attempt: 1 of 3 | Points Available: 2 Q1.b: Additional tax credit of $200 Question & Answer: AP 4.4 You are in the 25 percent marginal tax bracket. What is the marginal tax benefit of each of the following: Exclude commas from your response Attempt..... 1

Expert Answer

PART-1) Additional itemized deduction of $200: 15%

PART-2) Additional tax credit of $200: 28%

PART-3) Additional personal exemption of $4,000: 25%

Working: The Federal income tax has 7 brackets: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The standard deduction is subtracted from the Adjusted Gross Income (AGI), thus declining taxable income. In the computation of the taxable income, taxpayers are allowed to claim all personal exemptions they are eligible for under §151, and deduct that from the adjusted gross income amount

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