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Suppose you are offered a job with Amazon upon graduation. Your starting salary will be $70,000, which will put you in the 25 percent federal income tax bracket. The total amount of income taxes you pay is $13,530. Your average tax rate is approximately___________

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jepessoa

Answer:

19.3% average tax rate

Explanation:

The formula for calculating your average tax rate is simple: divide your total taxes due by your total gross income = $13,530 / $70,000 = 19.3$

The reason that the average tax rate is lower than the tax bracket is that the tax rates are progressive, that means that lower incomes pay lower tax rates.

For example people earning up to $9,700 only pay a 10% tax rate.