Question

In 2019. Lisa and Fred, a married couple, had taxable income of $309.700. If they were to file separate tax returns, Lisa would have reported taxable income of $128.200 and Fred would have reported taxable income of $181,500. Use Tax Rate Schedule for reference What is the couple's marriage penalty or benefit? (Do not round intermediate calculations.) Marriage benefit

Answer 1

Answer -

Step - (1) - Computation of Lisa's Tax Liability for Tax Year 2019 -

Taxable Income = $128200 [Given in question]

	Tax Rate	Taxable Income ($)	Calculation	Amount ($)
I.	10%	0 - 9700	$9700 * 10%	970
II.	12%	9700 - 39475	($39475 - $9700) * 12%	3573
III.	22%	39475 - 84200	($84200 - $39475) * 22%	9839.5
IV.	24%	84200 - 160725	($128200 - $84200) * 24%	10560
Lisa's Tax Liability			I + II + III + IV	24942.5

.

Step - (2) - Computation of Fred's Tax Liability for Tax Year 2019 -

Taxable Income = $181500 [Given in question]

	Tax Rate	Taxable Income ($)	Calculation	Amount ($)
I.	10%	0 - 9700	$9700 * 10%	970
II.	12%	9700 - 39475	($39475 - $9700) * 12%	3573
III.	22%	39475 - 84200	($84200 - $39475) * 22%	9839.5
IV.	24%	84200 - 160725	($160725 - $84200) * 24%	18366
V.	32%	160725 - 204100	($181500 - $160725) * 32%	6648
Fred's Tax Liability			I + II + III + IV + V	39396.5

.

Step - (3) - Computation of Joint Tax Liability for Tax Year 2019 -

Taxable Income = $309700 [Given in question]

	Tax Rate	Taxable Income ($)	Calculation	Amount ($)
I.	10%	0 - 19400	$19400 * 10%	1940
II.	12%	19400 - 78950	($78950 - $19400) * 12%	7146
III.	22%	78950 - 168400	($168400 - $78950) * 22%	19679
IV.	24%	168400 - 321450	($309700 - $168400) * 24%	33912
Joint Tax Liability			I + II + III + IV	62677

.

Step - (4) - Calculation of Couple’s Marriage Benefit -

	Particulars	Explanation	Amount ($)
I.	Lisa's Tax Liability	Calculated in step - (1)	24942.5
II.	Fred's Tax Liability	Calculated in step - (2)	39396.5
III.	Joint Tax Liability	Calculated in step - (3)	62677
Couple’s Marriage Benefit		I + II- III	1662