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Problem 1-38 (LO 1-1)
Determine the average amount of taxable income per tax return, for each of the ranges of taxable income provided, using the information in the below table. Taxable Income and Total Tax Liability are in thousands. (Enter your answers in dollars rounded to the nearest dollar value.)
| Ranges of Adjusted Gross Income | ||||||||||||||||||||||||||
| Item | Under $15,000 | $15,000 to under $30,000 | $30,000 to under $50,000 | $50,000 to under $100,000 | $100,000 to under $200,000 | $200,000 or more | ||||||||||||||||||||
| Number of returns | 36,181,194 | 30,321,571 | 26,110,889 | 32,327,738 | 17,534,600 | 6,210,595 | ||||||||||||||||||||
| Taxable income | $ | 22,125,213 | $ | 213,795,812 | $ | 553,217,626 | $ | 1,558,146,414 | $ | 1,787,498,797 | $ | 2,784,889,814 | ||||||||||||||
| Total tax liability | $ | 1,871,128 | $ | 18,569,250 | $ | 56,359,918 | $ | 201,900,692 | $ | 297,957,670 | $ | 781,434,510 | ||||||||||||||
| Average tax rate | 8.46 | % | 8.69 | % | 10.19 | % | 12.96 | % | 16.67 | % | 28.06 | % | ||||||||||||||
Expert Answer
In each case the average taxable income per return is calculated by dividing total taxable income by the number of tax returns.
Under $15,000 = 22,125,213,000 / 36,181,194 = $ 611.5114
$15,000 to Under $30,000 = 213,795,812,000 / 30,321,571 = $ 7050.95
$30,000 to Under $50,000 = 553,217,626,000 / 26,110,889 = $ 21187.24
$50,000 to Under $100,000 = 1,558,146,414,000 / 32,327,738 = $ 48198.44
$100,000 to Under $200,000 = 1,787,498,797,000 / 17,534,600 = $ 101941.24
$200,000 or more = 2,784,889,814,000 / 6,210,595 = $ 448409.50
