Question

Consider the following​ couple, who are engaged to be married. Assume that each person takes one exemption and the standard deduction. Answer the questions below using the tax rates in the table to the right.

Mia and Steve have adjusted gross incomes of $97,000 and ​$82,800​,

Tax Rate	Single		Married Filing Jointly
​10%		up to​ $9325		up to​ $18,650
​15%		up to​ $37,950		up to​ $75,900
​25%		up to​ $91,900		up to​ $153,100
​28%		up to​ $191,650		up to​ $233,350
​33%		up to​ $416,700		up to​ $416,700
​35%		up to​ $418,400		up to​ $470,700
​39.6%		above​ $418,400		above​ $470,700
Standard deduction		​$6350		​$12,700
Exemption ​(per person)		​$4050		​$4050

Calculate their income tax if they delay their marriage until next year so they can file their tax returns as individuals at the single tax rate this year.

Their income tax would be?

What is their income tax if they file jointly?

​(Round to the nearest dollar as​ needed.)

Answer 1

1.Calculation of income tax,if filling single

	Mia	Steve
Adjusted gross income	$97,000	​$82,800
Less:Standard deduction	$6350	$6350
Less:Exemption	$4050	$4050
Taxable Income	$86,600	$72400
Mia and steve falls under 25% tax bracket
Income tax on Taxable Income
On first $9325 @10%	$932.50	$932.50
On next ($37,950-$9325 ) @15%,	$4293.75	$4293.75
On balance @25%	$12,162.50	$8612.50
Total Income Tax	$17388.75	$13838.75

Thus Income tax for Mia is $17388 and for steve is $13838.

2.Calculation of income tax,if filling Jointly

	Amount($)
Adjusted gross income($97,000+​$82,800)	179,800
Less:Standard deduction	12,700
Less:Exemption(4050+4050)	8100
Taxable Income	$159,000
Steve and Mia falls under 28% tax bracket
Income Tax
On first $18650 @10%	1865.00
On next $($75,900-$18650) @15%	8587.50
On next $(153,100-75,900) @25%	19,300.00
On balance $(159,000-153,100) @28%	1652.00
Total income tax	31404.50

Thus Income tax when filing jointly is $31404.