Question

What are the tax liability, the marginal tax rate, and the average tax rate for a married couple filing jointly with $51,900 taxable income?

Answer 1

Answer:

Tax Liability: $5,840

Marginal Tax Rate: 12%

Average Tax Rate: 11%

Explanation:

*The tax liability is determined using the tax rate for 2019 tax bracket.

For married couple filling jointly, the tax rates for taxable income of $51,900 are:

Tax Rate                  Income Bracket

10%                          $0 – $19,400

12%                           $19,401 – $78,950

So the tax liability will be:

10% * $19,400 = $1,940                            (first $19,400)

12% * $32,500 = $3,900                           (Balance of $32,500)

Total tax liability = $5,840.

*Marginal tax rate is the tax rate paid on the last unit of income, the last dollar.  In this case, the last dollar was taxed at 12%. Hence the marginal tax rate is 12%.

*Average tax rate is the proportion of taxable income that is to be paid as tax. It is derived by dividing the tax liability by taxable income.

Average tax rate = $5840

                               $51,900

Average tax rate =11.2524%

Average tax rate = 11% (rounded up to whole figure)