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Find the taxable income and federal tax liability

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Reference no: EM132680023

Charles is a single taxpayer has the following income and deductions for the current tax year:

INCOME

Salary 70,000

Business Income 25,000

Interest Income from bonds 10,000

Tax-exempt bond interest 5,000

Total Income 110,000

DEDUCTIONS

Business expenses 10,000

Itemized deductions 20,000

Personal exemptions 4,050

Question 1: Compute the taxable income and federal tax liability for the current year.

Question 2: Compute the marginal, average and effective tax rates.

Question 3: For tax planning purposes, which of the three rates in part 2 is the most important?

Reference no: EM132680023

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