Question

Katie and Roberto have adjusted gross incomes of $47,000 and $32,800, respectively. Assume that each person takes one exemption and the standard deduction. Answer parts (a) through (c) below. Tax Rate Married Filing Single Jointly 10% up to $8,925 up to $17,850 15% up to $36,250 up to $72,500 25% up to $87,850 up to $146,400 28% up to $183,250 up to $223,050 Standard $6100 $12,200 Deduction Exemptions $3900 $3900 (per person) a. Calculate the tax owed by the couple if they delay their marriage until next year so they can each file a tax return at the single tax rate this year. The couple owes $ (Simplify your answer. Round to the nearest dollar as needed.) b. Calculate the tax owed by the couple if they marry before the end of the year and file a joint return. The couple owes $17. (Simplify your answer. Round to the nearest dollar as needed.)

Answer 1

Part A

Taxable income of Katie = AGI – standard deduction – person exemption = 47000-6100-3900 = 37000

Tax liability of Katie = (8925*10%)+(15%*(36250-8925))+(25%*(37000-36250)) = $5178.75

Taxable income of Roberto = AGI – standard deduction – person exemption = 32800-6100-3900 = 22800

Tax liability of Katie = (8925*10%)+(15%*(22800-8925)) = $2973.75

Total tax = 5178.75+1973.75 = $8152.5 = $8153

Part B

Total taxable income of couple = (47000+32800)-12200-(3900*2) = $59800

Tax liability of couple = (17850*10%)+(15%*(59800-17850)) = $8078