# Question & Answer: George, a single taxpayer, earns \$84,000 per year in taxable income and an additional \$14,000 per year in city of New York bonds……

George, a single taxpayer, earns \$84,000 per year in taxable income and an additional \$14,000 per year in city of New York bonds.

If George earns an additional \$40,000 in taxable income in year 2017, what is his marginal tax rate on this income?

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Question & Answer: George, a single taxpayer, earns \$84,000 per year in taxable income and an additional \$14,000 per year in city of New York bonds……
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## Expert Answer

George will owe \$16738.75 in federal income tax this year computed as follows:

\$16738.75 = \$5226.25 + {25% * (\$84,000 – \$37,950)}.

If George earns an additional \$40,000 of taxable income in 2017, tax =

\$27701.75 = \$18713.75 + {28% * (\$124,000 – \$91900)}

If George earns an additional \$40,000 of taxable income in 2017, his marginal tax rate on the income is 27.41 percent.

Marginal Tax Rate = Tax / Taxable Income

= (27701.75 – 16738.75) / (124000 – 84000)

= 27.41%