Income and deductions for tax year-tax planning purposes

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Reference no: EM131253586

Tax Rates. Latesha, a single taxpayer, had the following income and deductions for the tax year 2016: INCOME: Salary $80,000 Business Income 25,000 Interest income from bonds 10,000 Tax-exempt bond interest 5,000 TOTAL INCOME 120,000 DEDUCTIONS: Business expenses $9,500 Itemized deductions 20,000 Personal exemption 4,050 TOTAL DEDUCTIONS 33,550 a. Compute Latesha’s taxable income and federal tax liability for 2016 (round to dollars). b. Compute Latesha’s marginal, average, and effective tax rates. c. For tax planning purposes, which of the three rates in Part b is the most important?

Reference no: EM131253586

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