Geronimo files his tax return as a head of household for year 2018. If his taxable income is $73,000, what is his average tax rate? (Use Tax rate schedules)
Multiple Choice
14.53%
16.46%
19.18%
22.00%
None of the choices are correct.
| Correct answer is: 14.53% | ||||
| Workings: | ||||
| Taxable Income | = | $ 73,000 | ||
| Computation of tax payable: | ||||
| On first $13600 | = | $13600 X 10% | = | $ 1,360 |
| On next $38200 | = | $38200 X 12% | = | $ 4,584 |
| On remaining $21200 | = | $21200 X 22% | = | $ 4,664 |
| Income tax | $ 10,608 | |||
| Average tax rate | = | Tax payable / Taxable income | ||
| = | $10608 / $73000 | |||
| = | 14.53% | |||
Geronimo files his tax return as a head of household for year 2018. If his taxable...