Question

5. Jorge and Anita, married taxpayers, earn $150,000 in taxable income and $40,000 in interest from an investment in City of Heflin bonds. Using the U.S. tax rate schedule for married filing jointly, how much federal tax will they owe? What is their average tax rate? What is their effective tax rate? What is their current marginal tax rate? (Round your answers to 2 decimal places.)

6. Jorge and Anita, married taxpayers, earn $150,000 in taxable income and $40,000 in interest from an investment in City of Heflin bonds. (Use the U.S. tax rate schedule for married filing jointly). If Jorge and Anita earn an additional $100,000 of taxable income, what is their marginal tax rate on this income? What is their marginal rate if, instead, they report an additional $100,000 in deductions?

7. Scot and Vidia, married taxpayers, earn $240,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. Using the U.S. tax rate schedule for married filing jointly, how much federal tax will they owe? What is their average tax rate? What is their effective tax rate? What is their current marginal tax rate? (Round "Average tax rate" & "Effective tax rate" to 2 decimal places.)

8. Scot and Vidia, married taxpayers, earn $240,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds. (Use the U.S. tax rate schedule for married filing jointly). If Scot and Vidia earn an additional $80,000 of taxable income, what is their marginal tax rate on this income? What is their marginal rate if, instead, they report an additional $80,000 in deductions?

Answer 1

Answer:

From the above we can understand that taxpayers are married and they are willing to pay tax Jointly.

Federal Tax Brackets for Married Filing is Mentioned Below:

F.Y.2019-20 Federal Tax Bracket

Tax Rate	Income Level
10%	$0 to $19,400
12%	$19,401 to $78,950
22%	$78,951 to $168,400
24%	$168,401 to $321,450
32%	$321,451 to $408,200
35%	$408,201 to $612,350
37%	$612,351 or more

5. Jorge and Anita, married taxpayers, earn $150,000 in taxable income and $40,000 in interest from an investment in City of Heflin bonds.

Thus total Taxable Income of Jorge and Anita is $1,50,000.Since the city of Heflin Bond is a tax exempt bond.

Calculation of Federal Tax:

• The first $19,400 of his income is taxed at 10% for $1,940.
• Their next dollar earned falls in the second bracket at 12%. He is taxed at ($78,950 - $19,400) x 12% = $7,146.
• Their next dollar earned falls in the third bracket at 22%and last bracket for him .He is taxed at ($1,50,000-$78,950) x 22% =$15,631.
• Their total tax amount to be paid to the government in 2019 is $1,940 + $7,146 + $15,631= $24,717.

Calculation of Average Tax Rate:

Average Tax Rate= Total Tax/Taxable Income=$24,717/$1,50,000=16.48%

Calculation of Effective Tax rate:

Effective Tax Rate= Total Tax/Total Income=$24,717/($1,50,000+$40,000)=13.01%

Calculation of Current Marginal Tax Rate:

Jorge and Anita are currently in the 22 percent tax rate bracket.

Current Marginal Tax Rate is 22%.

6.Jorge and Anita, married taxpayers, earn $150,000 in taxable income and $40,000 in interest from an investment in City of Heflin bonds.

Case-1:Additionally they are also earning $100,000 of taxable income.

Calculation of Marginal Tax Rate on the above:

Total Taxable income after considering additional Taxable Income is $1,50,000+$1,00,000=$2,50,000

Marginal Tax Rate = Change in Tax/Change in Taxable Income

=($48,349-$24,717)/($2,50,000-$1,50,000)=23.63%

So,Marginal Tax Rate is 23.63% .

Case-2:Instead of additional taxable income, they report an additional $100,000 in deductions.

Calculation of Marginal Tax Rate on the above:

Total Taxable income after considering additional Deductions is $1,50,000-$1,00,000=$50,000

Marginal Tax Rate = Change in Tax/Change in Taxable Income

=($5,612-$24,717)/($50,000-$1,50,000)=19.11%

So,Marginal Tax Rate is 19.11% .

7. Scot and Vidia, married taxpayers, earn $240,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds.

Thus total Taxable Income of Scot and vidia is $2,40,000.

Calculation of Federal Tax:

• The first $19,400 of his income is taxed at 10% for $1,940.
• Their next dollar earned falls in the second bracket at 12%. He is taxed at ($78,950 - $19,400) x 12% = $7,146.
• Their next dollar earned falls in the third bracket at 22%.He is taxed at ($1,68,400-$78,950) x 22% =$19,679.
• Their next dollar earned falls in the fourth bracket at 24% and last bracket for him .He is taxed at ($2,40,000-$1,68,400) x 24% =$17,184.
• Their total tax amount to be paid to the government in 2019 is $1,940 + $7,146 + $19,679+$17,184= $45,949.

Calculation of Average Tax Rate:

Average Tax Rate= Total Tax/Taxable Income=$45.949/$2,40,000=19.15%

Calculation of Effective Tax rate:

Effective Tax Rate= Total Tax/Total Income=$45,949/($2,40,000+$5,000)=18.75%

Calculation of Current Marginal Tax Rate:

Scot and vidia are currently in the 24 percent tax rate bracket.

Current Marginal Tax Rate is 24%.

8.Scot and Vidia, married taxpayers, earn $240,000 in taxable income and $5,000 in interest from an investment in City of Tampa bonds.

Case-1:If Scot and Vidia earn an additional $80,000 of taxable income

Calculation of Marginal Tax Rate on the above:

Total Taxable income after considering additional Taxable Income is $2,40,000+$80,000=$3,20,000

Marginal Tax Rate = Change in Tax/Change in Taxable Income

=($65,149-$45,949)/($3,20,000-$2,40,000)=24%

So,Marginal Tax Rate is 24% .

Case-2: If instead of taxable income, they report an additional $80,000 in deductions.

Calculation of Marginal Tax Rate on the above:

Total Taxable income after considering additional Taxable Income is $2,40,000-$80,000=$1,60,000

Marginal Tax Rate = Change in Tax/Change in Taxable Income

=($26,917-$45,949)/($1,60,000-$2,40,000)=23.79%

So,Marginal Tax Rate is 23.79% .