Question

Toby and Nancy are engaged and plan to get married. Toby is a full-time student and earns $5,800 from a part-time job. With this income, student loans, savings, and nontaxable scholarships, he is self-supporting. For the year, Nancy is employed and reports $74,800 in wages.

Click here to access the standard deduction table to use. Click here to access the Tax Rate Schedules. If an amount is zero, enter, "0". Do not round your intermediate computations. Round your final answer to nearest whole dollar.

a. Compute the following:

Toby Filing Single Nancy Filing Single Gross income and AGI $ $ Standard deduction Taxable income $ $ Income tax $ $

b. Assume that Toby and Nancy get married in 2019 and file a joint return. What is their taxable income and income tax? Round your final answer to nearest whole dollar.

Married Filing Jointly Gross income $ Standard deduction Taxable income $ Income tax $

c. How much Federal income tax can Toby and Nancy save if they get married in 2019 and file a joint return?
$

Answer 1

(a) (i) Toby is filing the Single Return

Particulars	Amount
Gross Income or AGI	$5800
Less: Standard Deduction (since he is single filing separate - Standard Deduction is $ 12,200, however, it shall not exceed the AGI. Therefore, Standard deduction = $ 5800)	$5800
Taxable Income	Nil
Income Taxes	Nil

(ii) Nancy is filing the Individual Return

Particulars	Amount
Gross Income or AGI	$74800
Less: Standard Deduction (since he is single filing separate - Standard Deduction is $ 12,200)	$12200
Taxable Income	$62600
Income Taxes (The Taxable Income of $62600 comes in slab of $39476 - $84200, then tax is as follows: $4543+ 22% of amount over $39475 = $4543 + 22%[$62600-$39475] = $4543 + 22% [$23125] = $4543 + $5087.50 = $9630.50	$9630.50

(b) if Toby and Nancy get married in 2019 and file a joint return

Particulars	Amount
Gross Income or AGI ($5800 + $74800)	$80600
Less: Standard Deduction (since they are married and filing joint return - Standard Deduction is $ 24,400)	$24400
Taxable Income	$56200
Income Taxes (The Taxable Income of $56200 comes in slab of $19401-$78950, then tax is as follows: $1940+ 12% of amount over $19400 = $1940 + 12%[$56200-$19400] = $1940+ 12% [$36800] = $1940 + $4416 = $6356

(c) Federal Income Tax that Toby and Nancy can save if they get married in 2019 and file a joint return

Federal Income Tax if they file individual single return = $9630.50

Federal Income Tax if they file joint return = $6356

Savings = $9630.50 - $6356 = $3274.50