Answer: Kasar’s actual tax rate for the current year is 31.7%.
Explanation:
Given that,
Net income, before taxes, = $335,000
Interest revenue = $35,000
Paid for officers’ life insurance premiums = $12,000
Effective tax rate = 29.5%
In this question, income tax expense is equal to the income tax liability.
Income tax liability = Taxable income × Tax rate
Taxable income = $335,000 - $35,000 + 12000
= $312,000
Income tax liability = 335000 × 29.5%
= $98825
Actual tax rate = [tex]\frac{Income\ tax\ expense}{Taxable\ Income}[/tex]
= [tex]\frac{98825}{312000}[/tex]
= 31.70%
