Question

If any could please help with question E & F

Answer for Question C is $37,500

For tax purposes, "gross income" is all the money a person receives in a given year from any source. But income taxes are levied or "taxable income" rather than gross income. The difference between the two is the result of many exemptions and deductions. To see how they work, suppose you made $50,000 last year in wages, earned $10,000 from investments, and were given $5,000 as a gift by your grandmother. Also assume that you are a single parent with one small child living with you Instructions: Enter your answers as whole numbers. a. What is your gross income? $65,000 b. Gifts of up to $14,000 per year from any person are not counted as taxable income. Also, the "personal exemption" allows you to reduce your taxable income by $4,050 for each member of your household. Given these exemptions, what is your taxable income? $51,900 e. Apply the tax rates shown in the table below to your taxable income. Federal Personal Income Tax Rates, Head of Household 2016 Average Tax Rate on Highest Income in Bracket, % (3) Total Tax on Highest Income in Bracket Total Taxable Income Marginal Tax Rate $1-$13,250 $13,251-$50,400 $50,401-$130,150 $130,151-$210,800 $210,801-$413,350 $413,351-$441,000 $441,001 or more 10 15 25 28 $1,325 6,897.5 26,835 10.0 13.7 20.6 23.4 28.1 28.6 49,417 116,258.5 35 125,936 39.6 Instructions: For the following, round your answers to 1 decimal place How much federal income tax will you owe? What is the marginal tax rate that applies to your last dollar of taxable income? 15 percent f. As the parent of a dependent child, you qualify for the government's $1,000 per-child “tax credit." Like all tax credits, this $1,000 credit "pays" for $1,000 of whatever amount of tax you owe. Given this credit, how much money will you actually have to pay in taxes? Using that actual amount, what is your average tax rate relative to your taxable income in part d? percent What about your average tax rate relative to your gross income? percent

Answer 1

e. Federal income Tax Amount

on $50400 = $6897.5

on rest $1500 @ 25% = $375

Total = $7272.5

what is Marginal rate which applies to your last dollar = 25%  

f. Actually have to pay = $7272.5 - $1000 = $6272.5

Average tax rate relative to gross income =

$6272.5 / $65000 = 9.65%