Answer:
Jorge and Anita
Their marginal tax rate on their income is 24%.
Explanation:
a) Data and Calculations:
Taxable income = $142,000
Interest from municipal bonds = $49,000
Additional taxable income = $104,500
Total taxable income:
Taxable income = $142,000
Additional taxable income = $104,500
Total = $246,500
Their joint income is within the $165,601 - $315,000 band, which attracts 24% marginal tax rate.
b) Note that income from investing in municipal bonds is generally exempt from Federal and state taxes, especially for residents of the issuing state, except capital gains attributed to the investment.
