Solve the Problem $15 \%$ Marginal Rate Affects Income Starting At $\$ 8925$

question 29

Multiple Choice

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductions, and Exemptlons**


- Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$ , which is where the $10 \%$ rate leaves off, and continuing up to $\$ 36,250$ .
" This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers.
-You are married filing jointly and have a taxable income of $287,874. You make monthly contributions of $1095 to a tax-deferred savings plan. Calculate the effect on annual take-home pay
Of the tax-deferred contribution.

• A)Take-home pay will be $4336 less per year with tax-deferred plan
• B)Take-home pay will be $3679 less per year with tax-deferred plan
• C)Take-home pay will be $4336 more per year with tax-deferred plan
• D)Take-home pay will be $3679 more per year with tax-deferred plan

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