Using the Table Below, Assume a Single Person Has a Taxable

question 4

Short Answer

Using the Table below, assume a single person has a taxable income of $40,000.
$$\begin{array}{l}\underline{\text { Taxable Income }} \quad\underline{ \text { Tax Rate}}\\\begin{array} { l l } 0 - \$ 7,300 & 10 \% \\\$ 7,300 - \$ 29,700 & 15 \% \\\$ 29,700 - \$ 40,000 & 25 \%\end{array}\end{array}$$ (a) How much tax will be owed? (You will need to refer to the Table plus make your own calculations).
(b) What is the person's average tax rate?
(c) What is the person's marginal tax rate?

---

Definitions:

Asset Account

A financial account that tracks the value of assets owned by an individual, company, or entity.

Liability Account

A liability account records debts or obligations a company owes to others, appearing on the balance sheet.

Owner's Equity Account

An account on a company's balance sheet representing the owner's total interest in the business, after subtracting liabilities from assets.

Transaction

An agreement or communication carried out between two or more parties that results in the exchange of goods, services, or money.