Tameka has taxable income of $85,225 that is taxed as follows: $ 9 , 325 × 10 % = $ 932.50 ( $ 37 , 950 − $ 9 , 325 ) × 15 % = 4 , 293.75 ( $ 854 , 225 − $ 37 , 950 ) × 25 % = 11 , 818.75 Total tax $ 17 , 045.00 \begin{array}{lr}\$ 9,325 \times 10 \%= & \$932.50\(\$ 37,950-\$ 9,325) \times 15 \%= & 4,293.75\(\$ 854,225-\$ 37,950) \times 25 \%= & 11,818.75\\text { Total tax } & \$17,045.00\end{array} $9 , 325 × 10% = ( $37 , 950 − $9 , 325 ) × 15% = ( $854 , 225 − $37 , 950 ) × 25% = Total tax $932.50 4 , 293.75 11 , 818.75 $17 , 045.00 Her marginal tax rate is:A) 25%.B) 20%.C) 15%.D) 10%.

Question

Tameka has taxable income of $85,225 that is taxed as follows:   $ 9 , 325 × 10 % = $ 932.50 ( $ 37 , 950 − $ 9 , 325 )  × 15 % = 4 , 293.75 ( $ 854 , 225 − $ 37 , 950 )  × 25 % = 11 , 818.75  Total tax  $ 17 , 045.00 \begin{array}{lr}\$ 9,325 \times 10 \%= & \$932.50\(\$ 37,950-\$ 9,325)  \times 15 \%= & 4,293.75\(\$ 854,225-\$ 37,950)  \times 25 \%= & 11,818.75\\text { Total tax } & \$17,045.00\end{array} $9 , 325 × 10% = ( $37 , 950 − $9 , 325 )  × 15% = ( $854 , 225 − $37 , 950 )  × 25% =  Total tax  ​ $932.50 4 , 293.75 11 , 818.75 $17 , 045.00 ​ Her marginal tax rate is:A) 25%.B) 20%.C) 15%.D) 10%.

Zybrea Knight · Accepted Answer

Final Answer : A, Explanation :  The marginal tax rate is the rate at which the last dollar of income is taxed. In Tameka's case, her income falls into the 25% tax bracket, making her marginal tax rate 25%.

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