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

question 101

Multiple Choice

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductlons, 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.
-Kelly earned wages of $87,240, received $4814 in interest from a savings account, and contributed $ 6070 to a tax deferred retirement plan. She was entitled to a personal exemption of $3900 and had
Deductions totaling $9049. Find her gross income.

• A)$85,984
• B)$98,124
• C)$92,054
• D)$73,035

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Definitions:

LIBOR

The London Interbank Offered Rate, previously a benchmark interest rate at which major global banks lend to one another.

Bankers' Acceptances

Short-term debt instruments issued by a company that is guaranteed by a commercial bank, commonly used in international trade.

Brokers' Calls

The interest rate charged by banks on loans extended to brokerage firms for the purpose of funding clients' margin accounts.

Residual Claimant

An individual or entity entitled to a share of a company's assets only after all debts and other obligations have been met in the event of liquidation.