Question

Leonardo, who is married but files separately, earns $80,000 of taxable income. He also has $15,000 in city of Tulsa bonds. His wife, Theresa, earns $50,000 of taxable income. if Leonardo and his wife file married filing jointly in 2019, What is Leonardo and Theresa's effective tax rate for 2019 (rounded)? (Use tax rate schedule.)

Answer 1

Leonardo's taxable incme Theresa's taxable income Total taxable income $ 80,000 $ 50,000 $ 130,000 using the Schedule Y-1, the tax on total income shall be as follows tax liability = $9,086 + (($130,000 - $78,950) * 22%) tax liability = $9,086 +($51,050 * 22%) tax liability = $9,086 + $11,231 tax liability = $ 20,317 Effective tax rate = tax liability / Total taxable income Effective tax rate = $20,317/ $130,000 Effective tax rate = 15.63% hence, the correct answer is B) 15.63 percent

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