To calculate the effective tax rate for a taxable income of [tex]$23,470, we need to consider the marginal tax brackets and apply the given rates progressively. Let’s break it down step by step:
1. Determine the income portion within each tax bracket:
- The first bracket covers income from $[/tex]0 to [tex]$10,275 at a rate of 10%.
- The second bracket covers income from $[/tex]10,276 to [tex]$41,175 at a rate of 12%.
Given the taxable income is $[/tex]23,470:
2. Calculate the tax for each bracket:
- For the first bracket ([tex]$0 - $[/tex]10,275):
- Income portion = [tex]$10,275
- Tax = $[/tex]10,275 * 10% = [tex]$1,027.50
- For the second bracket ($[/tex]10,276 - [tex]$23,470, since $[/tex]23,470 is less than [tex]$41,175):
- Income portion = $[/tex]23,470 - [tex]$10,276 + 1 = $[/tex]13,195
- Tax = [tex]$13,195 * 12% = $[/tex]1,583.40
3. Sum the taxes from each bracket to get the total tax:
- Total tax = [tex]$1,027.50 (first bracket) + $[/tex]1,583.40 (second bracket)
- Total tax = [tex]$2,610.90
4. Calculate the effective tax rate:
- Effective tax rate = (Total tax / Total income) * 100
- Effective tax rate = ($[/tex]2,610.90 / [tex]$23,470) * 100
- Effective tax rate ≈ 11.12%
5. Round the effective tax rate to the nearest hundredth:
- Rounded effective tax rate = 11.12%
Hence, the effective tax rate for a taxable income of $[/tex]23,470 is approximately 11.12%, which is not listed among the provided options ([tex]$12.00 \%, $[/tex]13.49 \%, $15.63 \%).
Therefore, using the steps outlined, the effective tax rate is confirmed as 11.12%, given none of the provided answer choices match this rate.
