Leonardo, Who Is Married but Files Separately, Earns $70,500 of Taxable

question 2

Multiple Choice

Leonardo, who is married but files separately, earns $70,500 of taxable income. He also has $19,400 in city of Tulsa bonds. His wife, Theresa, earns $54,400 of taxable income. If Leonardo and his wife are married filing jointly in 2020, what is Leonardo and Theresa's effective tax rate for 2020? (Use tax rate schedule.) (Round your final answer to two decimal places.)

• A)12.00 percent
• B)14.92 percent
• C)19.52 percent
• D)22.00 percent
• E)None of the choices are correct.

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Definitions:

Ethics Double-check

A process or step taken to ensure that actions, decisions, or policies adhere to ethical standards and principles.

Bounded Rationality

The concept that when individuals make decisions, their rationality is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision.

Intellectual Capital

Refers to the intangible value of a business, representing the sum of its knowledge, skills, inventions, and connections.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to mind when evaluating a specific topic, concept, method, or decision.