Tax Rate Calculation for a Firm in 2017

What is the average tax rate for a firm with taxable income of $118,740 in 2017?

taxable income tax rate:

$ 0 - 50,000: 15%

50,001 - 75,000: 25%

75,001 - 100,000: 34%

100,001 - 335,000: 39%

Question 3

Select one:

a. 26.68 percent

b. 39.00 percent

c. 36.67 percent

d. 24.89 percent

e. 34.87 percent

Final answer:

The average tax rate for a firm with taxable income of $118,740 in 2017 is 39%. This rate applies to the income range of $100,001 to $335,000 under the progressive tax system in the U.S.

Explanation:

The average tax rate for a firm with a taxable income of $118,740 in 2017 would fall under the taxable income tax rate $100,001 - $335,000 which is 39%. This is the highest tax bracket for corporate tax for the given income ranges. As part of progressive tax system in the United States, tax rates increase as the taxpayer's income increases. The percentage 39% represents the marginal tax rate for that income range, meaning any additional income earned in that range would be taxed at that rate.