Using Excel to find the marginal tax rate can be accomplished using the VLOOKUP function. However, calculating the total tax bill is a little more difficult. Below we have shown a copy of the IRS tax table for an individual for 2015 (the income thresholds are indexed to inflation and change through time).
In reading this table, the marginal tax rate for taxable income less than $9,225 is 10 percent. If the taxable income is between $9,226 and $37,450, the tax bill is $922.50 plus the marginal taxes. The marginal taxes are calculated as the taxable income minus $9,225 times the marginal tax rate of 15 percent.
a. Create a tax table for corporate taxes similar to the individual tax table shown above.
b. For a given taxable income, what is the marginal tax rate?
c. For a given taxable income, what is the total tax bill?
d. For a given taxable income, what is the average tax rate?
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