Question

Rates for a married taxpayer filing separately are 10% of taxable income up to $8,375 and...

  1. Rates for a married taxpayer filing separately are 10% of taxable income up to $8,375 and 15% thereafter up to $34,000. Rates for a couple filing a joint return are 10% of taxable income up to $16,750 and 15% thereafter up to $68,000. Miller and Laura Collins are figuring their tax both ways for comparison before deciding which way to file. Miller earned $20,000 and Laura earned $40,000. The standard deduction for a married couple filing jointly is $11,400. The standard deduction for each married taxpayer filing separately is $5,700. Exemption for each taxpayer is $3,650.​

a.

Compute the amount of tax the Collins will owe if they file a joint return.

b.

Compute the amount of tax the Collins will owe if they file two separate returns.

Homework Answers

Answer #1

a) Amount of tax the Collins will owe if they file a joint return.

Particulars Workings Amount
Total Income $20000+$40000 $60000
Standard Deduction Given ($11400)
Exemption $3650*2

($7300)

Total taxable income $41300

Tax Computaion: $16750*10%=1675

$41300-$16750=$24550*15%=$3682.5

Total Tax liability = $1675+$3682.5=$5357.5

b) Tax liability if Collins file seperate return:

Particulars Miller Laura
Total Income $20000 $40000
Standard Deduction ($5700) ($5700)
Exemption ($3650) ($3650)
Total Taxable Income $10650 $30650
Tax Computation

$8375*10%=$837.5

$10650-$8375=$2275*15%=$341.25

Total Tax=$837.5+$341.25=$1178.75

$8375*10%=$837.5

$30650-$8375=$22275*15%=$3341.25

Total Tax=$837.5+$3341.25=$4178.75

Total Tax Payable by Collins= $1178.75+$4178.75=$5375.5

CONCLUSION: Tax Payable in both the situations are equal.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
2013 Individual Tax Rates Single Individuals If a Corporation's Taxable Income Is It Pays This Amount...
2013 Individual Tax Rates Single Individuals If a Corporation's Taxable Income Is It Pays This Amount on the Base of the Bracket Plus This Percentage on the Excess over the Base (Marginal Rate) Average Tax Rate at Top of Bracket Up to $8,925 $0 10.0% 10.0% $8,925 - $36,250 892.50 15.0 13.8 $36,250 - $87,850 4,991.25 25.0 20.4 $87,850 - $183,250 17,891.25 28.0 24.3 $183,250 - $398,350 44,603.25 33.0 29.0 $398,350 - $400,000 115,586.25 35.0 29.0 Over $400,000 116,163.75 39.6...
What would be the marginal and average tax rates for a married couple with taxable income...
What would be the marginal and average tax rates for a married couple with taxable income of $90,000? For an unmarried taxpayer with the same income? Use Table 3.7. (Do not round intermediate calculations. Enter the marginal tax rate as a percent rounded to 1 decimal place. Enter the average tax rate as a percent rounded to 1 decimal place.) a. What would be the marginal tax rate for a married couple with income of $90,000? b. What would be...
25) Leonardo, who is married but files separately, earns $64,000 of taxable income. He also has...
25) Leonardo, who is married but files separately, earns $64,000 of taxable income. He also has $16,800 in city of Tulsa bonds. His wife, Theresa, earns $51,800 of taxable income. If Leonardo and his wife file married filing jointly in 2020, what would be their average tax rate?(Use tax rate schedule.) (Round your final answer to two decimal places.) Multiple Choice 12.00 percent 22.00 percent 14.73 percent 21.78 percent None of the choices are correct
Mr. Mason’s salary was $397,000, and Mrs. Mason’s salary was $344,000. They had no other income...
Mr. Mason’s salary was $397,000, and Mrs. Mason’s salary was $344,000. They had no other income items, no above-the-line or itemized deductions, and no dependents. Assume the taxable year is 2019. Use Individual Tax Rate Schedules and Standard Deduction Table. Compute their tax on a joint return. Compute their combined tax if they file separate returns (married filing separately). Compute their marriage penalty (excess of tax on a joint return over combined tax on two returns filed as single taxpayers).
1.Priscilla (35) is divorced from Bernardo (40). They are the parents of Sal (12). Sal lives...
1.Priscilla (35) is divorced from Bernardo (40). They are the parents of Sal (12). Sal lives with his mother who pays over half the cost of maintaining the home. The divorce decree gives Bernardo the unconditional right to claim the dependency exemption for Sal. Sal meets all of the tests for dependency for Priscilla for qualifying child. What is Priscilla's most advantageous filing status for 2018? A. Single. B. Head of household. C. Married filing jointly. D. Married filing separately....
1.Priscilla (35) is divorced from Bernardo (40). They are the parents of Sal (12). Sal lives...
1.Priscilla (35) is divorced from Bernardo (40). They are the parents of Sal (12). Sal lives with his mother who pays over half the cost of maintaining the home. The divorce decree gives Bernardo the unconditional right to claim the dependency exemption for Sal. Sal meets all of the tests for dependency for Priscilla for qualifying child. What is Priscilla's most advantageous filing status for 2018? A. Single. B. Head of household. C. Married filing jointly. D. Married filing separately....
Question 1: In 2018, Lisa and Fred, a married couple, have taxable income of $300,000. If...
Question 1: In 2018, Lisa and Fred, a married couple, have taxable income of $300,000. If they were to file separate tax returns, Lisa would have reported taxable income of $125,000 and Fred would have reported taxable income of $175,000. What is the couple’s marriage penalty or benefit? Question 2: Henrich is a single taxpayer. In 2018, his taxable income is $450,000. What are his income tax and net investment income tax liability in each of the following alternative scenarios?...
Heather, a single taxpayer who files as a head of household, earns $60,900 in taxable income...
Heather, a single taxpayer who files as a head of household, earns $60,900 in taxable income and $9,500 in interest from an investment in city of Oxford Bonds. Using the U.S. tax rate schedule for year 2019, how much federal tax will she owe? What is her average tax rate? What is her effective tax rate? What is her current marginal tax rate? If Heather has an additional $29,000 of tax deductions, what is her marginal tax rate on these...
1. The U.S. income tax was enacted by the _____ amendment to the Constitution. a.16th b.18th...
1. The U.S. income tax was enacted by the _____ amendment to the Constitution. a.16th b.18th c.2nd d.13th 2. Tax law is a tool used by government to: a.Raise revenue to run government b.Support research and development c.Further economic goals d.Encourage social objectives e.All of these choices are correct. 3. Entities required to report income to the IRS are: a.Partnerships b.Estates c.Trusts d.Corporations e.All of these choices are correct. 4. What is reported on Schedule A of Form 1040? a.Itemized...
Taxable Income Item 1: Matt and Skye Moriarty are a married couple who file a joint...
Taxable Income Item 1: Matt and Skye Moriarty are a married couple who file a joint tax return. Matt is 66. Skye is 40. They got married five years ago. This is the second marriage for them both. Item 2: Matt has a nineteen-year-old son who lives with the couple. The son is a full-time student. Together, Matt and Skye have twin four-year-old daughters who live with them as well. Item 3: Up until last year, Matt was a high-powered...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT