The Lowell family tells you the following regarding their financial situation for 2015: Their gross salary is $95,000. They paid real estate taxes of $8,000 and interest on their mortgage of $6,000.
They earned $1,500 in interest from a Cortland County highway bond. They made $6,000 on the sale of 5 acres that they had owned for 2 years.
They also made $2,000 on the sale of Sun Edison stock they owned for 9 months. The couple has one child. Exemptions are $3,800/person.
a. WHAT IS THEIR TAXABLE INCOME? SHOW YOUR WORK STEP BY STEP.
b.Use the table below to determine their tax liability: SHOW YOUR WORK.
| Taxable Income |
Tax Rate |
| Up to $25,000 |
10% |
| $25,000 -$40,000 |
15% |
| $40,000 - $55,000 |
20% |
| $55,000-$70,000 |
25% |
| over $70,000 |
35% |
c. What is the family's marginal tax rate?
d. What is the family's average rate? Show your calculation.