Question

Based on the following data, will Ann and Carl Wilton receive a federal tax refund or owe additional taxes in 2016?(Input the amount as a positive value. Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)

Taxable IncomeTax Rate

$0-$45,282 15%

$45,282-$90,563 20.5%

$90,563-$140,388 26%

$140,388-$200,000 29%

Net income $49,550

Deductions to determine net income $11,930

Federal income tax withheld $7,099

Total non-refundable tax credit amounts, excluding medical expenses $10,364

Medical expenses $3,000

Answer 1

Answer:

Given data :

Net income = $49,550

Deductions to determine net income = $11,930

Federal income tax withheld = $7,099

Total non-refundable tax credit amounts, excluding medical expenses = $10,364

Medical expenses = $3,000

Now we have to find out the:

A federal tax refund or owe additional taxes in 2016 :

We know the formula for the federal tax refund is,

federal tax refund = Federal income tax - Federal personal Amount

= 20% of net income - 15% of Total Non- federable tax

= (20/100) * $49,550 - (15/100) (excluding medical expenses +Medical expenses )

= 0.2* 49550 - (0.15 )( $10,364 +$3,000 )

= $ 9910 - 0.15*13364

= $ 9910 - $ 2004.6

= $7,905.4

$\therefore$ Federal tax refund =  $7,905.4

Will Ann and Carl Wilton pays amount = Federal tax refund - Federal income tax withheld $7,099

= $ 7,905.4 - $7,099

= $ 806.4

Will Ann and Carl Wilton pays amount = $ 806.4

( Additional Taxes will be selected)