Campbell, a single taxpayer, earns $295,000 in taxable incomeand $6,400 in interest from an investment in State of New Yorkbonds. (Use the U.S. tax rate schedule). Required: If Campbellearns an additional $20,500 of taxable income, what is her marginaltax rate on this income? What is her marginal rate if, instead, shehad $20,500 of additional deductions? (For all requirements, do notround intermediate calculations.)
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| | | | | | a. | Marginal tax rate | | % | | b. | Marginal tax rate | | % |
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2018 Tax Rate Schedules
Individuals
Schedule X-Single
| If taxable income isover: | But not over: | The tax is: |
|---|
| $ 0 | $ 9,525 | 10% of taxable income |
| $ 9,525 | $ 38,700 | $952.50 plus 12% of the excess over $9,525 |
| $ 38,700 | $ 82,500 | $4,453.50 plus 22% of the excess over $38,700 |
| $ 82,500 | $157,500 | $14,089.50 plus 24% of the excess over $82,500 |
| $157,500 | $200,000 | $32,089.50 plus 32% of the excess over $157,500 |
| $200,000 | $500,000 | $45,689.50 plus 35% of the excess over $200,000 |
| $500,000 | — | $150,689.50 plus 37% of the excess over $500,000 |
