Question

A married couple with 3 children is filing taxes jointly. They have a gross income of $348,198, and they made the following tax-deductible purchases: . Charitable contributions: $7,857 • Medical expenses: $2,392 . Mortgage interest: $4,020 Compute their final income tax using the following information: Married Individuals Filing Joint Returns and Surviving Spouses Taxable Income Is Between! The Tax Due is: 0 - $19.750 10% of taxable income $19,751 - $80,250 $1.975 +12% of the amount over $19.750 $80,251 - $171,050 $9,235 -22% of the amount over $80,250 $171,051 - $326,600 $29,211 +24% of the amount over $171,050 $326,601 - $414.700 $66,543 + 32% of the amount over $326,600 $414,701 - $622,050 $94,735 + 35% of the amount over $414,700 $622,051 $167,307,50 + 37% of the amount over $622,050 Round your answer to the nearest dollar. Recall the standard deduction for married filers: $24,800

Answer 1

Answer:

net tax payable = $ 64,809.26

Explanation:

Calculation for net taxable income

Particulars	$	$
Gross income		348,198
Less: Above the line deduction :
Mortgage Loan interest		4,020
Adjusted gross income (AGI)		344,178
less: standard deduction or itemized deduction ( which ever is higher)
A) Itemized deduction
Medical expenses (actual medical expenses in excess of 7.5% of AGI)	nil
$ 2,392- { 7.5% of $ 344,178} = ( $ 2,392)	-
Charitable contribution { $ 7,857 X 50%}	3,928.5
Total itemized deduction	3,928.5
B) Standard deduction	24,800
Standard deduction taken because it is higher than itemized deduction		24,800
Net taxable income		319,378

Calculation for net tax payable

Range of net taxable income	Rate of tax	Tax liability
Up-to $ 19,750	10%	$ 1,975
$ 19,751 to $ 80,250	12%	$ 7,260
$ 80,251 to $ 171,050	22%	$ 19,975.78
$171,051 to $319,378	24%	$ 35,598.48
PFinal income tax payable =	$ 64,809.26