Question

simple income tax
michael has a taxable income of $90,000 and his total tax owed is $13,500. what is his effective tax rate?
10%
15%
18%
12%

Explanation:

Step1: Recall effective tax rate formula

Effective Tax Rate = $\frac{\text{Total Tax Owed}}{\text{Taxable Income}} \times 100\%$

Step2: Plug in given values

Substitute $\text{Total Tax Owed} = 13500$, $\text{Taxable Income} = 90000$:
$\text{Effective Tax Rate} = \frac{13500}{90000} \times 100\%$

Step3: Calculate the rate

Simplify $\frac{13500}{90000} = 0.15$, then $0.15 \times 100\% = 15\%$

Answer:

B. 15%