Heather, a Single Taxpayer Who Files as a Head of Household

question 23

Essay

Heather, a single taxpayer who files as a head of household, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Oxford Bonds. Using the U.S. tax rate schedule for year 2016, how much federal tax will she owe? What is her average tax rate? What is her effective tax rate? What is her current marginal tax rate? If Heather has an additional $20,000 of tax deductions, what is her marginal tax rate on these deductions? (Round the tax rates to 2 decimal places, e.g., .12345 as 12.35%)

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Definitions:

Departmental Overhead Method

A technique in accounting used to allocate overhead costs to specific departments based on relevant allocation bases such as direct labor hours or machine hours.

Volume-related Measures

Quantitative assessments related to the amount or size of something, especially used in the context of production and sales.

Overhead Costing Accuracy

The degree to which allocated overhead costs accurately represent the actual expenses incurred by the production process or specific products.

Plantwide Overhead Rate

An overhead allocation rate used throughout an entire plant or company to allocate indirect costs to products.