Question

Problem 3-39 (Algorithmic) (LO. 5, 6, 9)

Chris and Heather are engaged and plan to get married. During 2020, Chris is a full-time student and earns $6,700 from a part-time job. With this income, student loans, savings, and nontaxable scholarships, he is self-supporting. For the year, Heather is employed and has wages of $68,200.

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:

	Chris Filing Single		Heather Filing Single
Gross income and AGI	$		$
Standard deduction
Taxable income	$		$
Income tax	$		$

If married individuals elect to file separate returns, each reports only his or her own income, exemptions, deductions, and credits, and each must use the Tax Rate Schedule applicable to married taxpayers filing separately. It is generally advantageous for married individuals to file a joint return, because the combined amount of tax is lower.

b. Assume that Chris and Heather get married in 2020 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 and AGI	$
Standard deduction
Taxable income	$
Income tax	$

$c. How much income tax can Chris and Heather save if they get married in 2020 and file a joint return?

Answer 1

a.)		Roy	Brandi
		Filling Single	Filling Single
	Gross Income & AGI	6,700	68,200
	Less: Standard deduction	12,400	12,400
	Taxable Income	-	55,800
	Income Tax	-	$ 8,066	{ 4617.5+((55800-40125)*22%) }

b.)		Married
		Filling jointly
	Gross Income & AGI	74,900	(6,700 + 68,200 )
	Less: Standard deduction	24,800
	Taxable Income	50,100
	Income Tax	$ 5,617	=1975+((50100-19750)*12%)
c.)	Tax saving	$ 2,449
	(8,066 - 5,617 )