Problem:

Ted and Sally are married taxpayers. They earn $53,000 of taxable income and an additional $1,000 in interest from a bond issued by the State of California. Assuming they file jointly, answer the following. (Round all tax rates to 2 decimal places)

Required:

Question 1: What is their federal tax liability?

Question 2: What is their average tax rate?

Question 3: What is their effective tax rate?

Question 4: What is their current marginal tax rate?

Question 5: What would their marginal tax rate be if their taxable income increased by an additional $28,000?

Note: Provide support for your rationale.