Question

2015 Tax Rates
Tax Rate	Single		Married Filing Jointly
Ordinary Income	Taxable Income over	To	Taxable Income over	To
10%	$0	$9,225	$0	$18,450
15%	9,225	37,450	18,450	74,900
25%	37,450	90,750	74,900	151,200
28%	90,750	189,300	151,200	230,450

Instructions: Round your final answer and all intermediate calculations to the nearest whole number.

Use the tax table to compute the taxes of someone who has a spouse and three children, has income of $135,000, and takes the standard deduction. The standard deduction is $6,300 for a single person and $12,600 for a married couple. Exemptions are $4,000 for each person in the household.

Taxes =

Answer 1

This would be under “married filing jointly”.

There are 5 persons in the family – the tax payer, the spouse, and 3 children.

Therefore, the amount of exemption is (5 × $4,000 =) $20,000.

Taxable income = Gross income – Exemption

                           = 135,000 – 20,000

                           = 115,000

Income for tax calculation = Taxable income – Standard deduction

                                                = 115,000 – 12,600

                                                = 102,400

Tax calculation:

Tax = 18,450 × 10% + (74,900 – 18,450 =) 56,450 × 15% + (102,400 – 18,450 – 56,450 =) 27,500 × 25%

       = 1,845 + 8,467.50 + 6,875

       = 17,187.50 (Answer)