How do you define the marginal tax rate? 1. is the tax on the last dollar of inc

Question

How do you define the marginal tax rate?

1. is the tax on the last dollar of income, 2. is the tax on the first dollar of income 3. is the same as the average tax rate. 4. has little impact on investment decision making

Your own retirement account for the self-employed is called a

a. 401 (k) plan b. Keogh account (HR10 account) c. 10-k report d. tax-deferred annunity

with a roth iRA, the individual: a. may decut the annual contributions, b. earns tax-free income c. defers taxes d. avoids estate taxes

Explanation / Answer

Marginal tax is the tax paid on additional taxable income earned. Marginal tax increases with increase in income and decreases with decrease in income.

Hence, correct option is 1. is the tax on the last dollar of income.

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