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Taxes paid for a given income level Juanita is getting ready to do her taxes. She is single and lives in Denver. Juanita earned $90,000 in 2011. She reviews the following table, which shows the IRS tax rates for a single taxpayer in 2011. On Annual Taxable Income... The Tax Rate Is... (Percent) Up to $8,500 10 From $8,500 to $34,500 15 From $34,500 to $83,600 25 From $83,600 to $174,400 28 From $174,400 to $379,150 33 Over $379,150 35 Based on the IRS table, Juanita calculates that her marginal tax rate is__% when her annual income is $90,000. Juanita calculates that she owes$__ in income taxes for 2011. Juanita then calculates that her average tax rate is ___, based on the annual income level and the amount of taxes she owes for 2011. After figuring out what she owes in taxes in 2011, Juanita decides to ask an accountant for tax advice. The accountant claims that he has found a legal way to shelter $2,000 of taxable income from the federal government. The maximum amount that Juanita is willing to pay to learn this strategy and reduce her taxable income by $2,000 is __. (Hint: Sheltering some income means finding a legal way to avoid being charged income tax on that income. For example, someone who has $50,000 in income and shelters $10,000 pays income tax on only $40,000.)

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