Question

P1.4 (similar to) Data Table Mike and Julie Bedard are a working couple. They will fle a joint income tax return. This year they have the following taxable income: 1. $122,000 from salary and wages (ordinary Income) 2. $4,000 in interest income 3. S5,000 in dividend income. 4. 54,000 in profit from sale of a stock they purchased 2 years ago. 5. 52,000 in profit from a stock they purchased this year and sold this year. TABLE 12: Tax Rates and Income Brackets for Joint Returns 2015) Taxable Income Tax Rates 10% Use the federal income tax rates given in Table 1.2, EEBto work this problem. a. How much will Mike and Julie pay in federal income taxes on 2 above? b. How much will Mike and Julie pay in federal income taxes on 3 above?(Note: Rmberthat dividend income is taxed differently than ordinary income c. How much will Mike and Julie pay in federal income taxes on 4 above? d. How much will Mike and Julie pay in federal income taxes on 5 above? 50 to $18,150 $18,151 to $73,800 $73,801 to $148,850 $148,851 to $226,850 5226,851 to $405,100 $405,101 to $457,600 Over $457,600 a. The amount Mike and Julie will pay in federal income taxes on 2, their interest income, is Round to the nearest dollar.) 39.6% Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet) Print Done

Answer 1

A. =4000 X 25% = 1000 (As the Joint income together comes to 122000 (Salary) the slab they are covered under is 25%

B. =5000 X 15% = 750 (Dividend Income is taxed at the rate of 15%)

C. =4000 X 15% = 600 (Long term Capital Gain taxed at 15%)

D. =2000 X 25% = 500 (Short term capital gain taxed at normal rate)

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