Question

What is your margin tax rate________ and what is your average tax rate_________?

During the year you earned $48,000 after deductions and exceptions and paid $8,188 in taxes.

Tax rate over up to
10% 0 8,350
15% 8,350 33,950
25% 33,950 82,250
28% 82,250 171,550
33% 171,550 372,950
35% 372,950

Answer 1

The marginal tax rate is the additional tax payable for an additional dollar of taxable income.

$48,000 taxable income falls in the 25% bracket (taxable incomes between $33,950 and $82,250), therefore the marginal tax rate is 25%.

The average tax rate is the tax payable divided by the taxable income.
The tax payable is $8187.50 calculated according to the table. The tax authorities usually round to the nearest dollar, which makes $8188.
The taxable income is $48,000.
The average tax rate is therefore $8,188/$48000= 17.1%