Question

Ms. Gomez earned a $91,250 salary, and Mr. Hill earned a $171,000 salary. Neither individual had any other income, and neither can itemize deductions. Assume the taxable year is 2020. Use Individual Tax Rate Schedules and Standard Deduction Table.

Required: Compute Ms. Gomez and Mr. Hill’s combined tax if they file as single individuals.

Compute Ms. Gomez and Mr. Hill’s tax if they are married and file a joint return.

Answer 1

Gomez tax:

Filing status	Single	Gomez
Particulars	Amount	Amount
Gross income:
Income	$          91,250
Gross income		$          91,250
For AGI deductions		$                   -
Adjusted gross income		$          91,250
Less:
Standard deduction	$          12,400
Itemized deduction	$                   -
Higher of the two	$          12,400	$         (12,400)
Personal exemptions		$                   -
Taxable income		$          78,850
Income tax liability		$    13,137.00
[ 4617.5 + ( 78850 - 40125 ) × 0.22 ]

Hill tax:

Filing status	Single	Hill
Particulars	Amount	Amount
Gross income:
Income	$        171,000
Gross income		$        171,000
For AGI deductions		$                   -
Adjusted gross income		$        171,000
Less:
Standard deduction	$          12,400
Itemized deduction	$                   -
Higher of the two	$          12,400	$         (12,400)
Personal exemptions		$                   -
Taxable income		$        158,600
Income tax liability		$    32,143.50
[ 14605.5 + ( 158600 - 85525 ) × 0.24 ]

Total tax if they file single =

Particulars	Individually
Tax liability
Gomez	$    13,137.00
Hill	$    32,143.50
Total tax	$    45,280.50

Joint return tax:

Filing status	Joint
Particulars	Amount	Amount
Gross income:
Income	$        262,250
Gross income		$        262,250
For AGI deductions		$                   -
Adjusted gross income		$        262,250
Less:
Standard deduction	$          24,800
Itemized deduction	$                   -
Higher of the two	$          24,800	$         (24,800)
Personal exemptions		$                   -
Taxable income		$        237,450
Income tax liability		$    45,147.00
[ 29211 + ( 237450 - 171050 ) × 0.24 ]