Question

In 2019, 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 $200,000 and Fred would have reported taxable income of $100,000.

A- What is the couple’s marriage penalty or benefit? (Enter a penalty as a positive and a benefit as a negative)

n 2019, Jasmine and Thomas, a married couple, have taxable income of $145,000. If they were to file separate tax returns, Jasmine would have reported taxable income of $130,000 and Thomas would have reported taxable income of $15,000.

B-What is the couple’s marriage penalty or benefit? (Enter a marriage benefit as a negative.)

Answer 1

Tax Brackets and Rates, 2019

Tax Bracket / Filing Status	Single	Married Filing Jointly
10%	$0 to $9,700	$0 to $19,400
12%	$9,701 to $39,475	$19,401 to $78,950
22%	$39,476 to $84,200	$78,951 to $168,400
24%	$84,201 to $160,725	$168,401 to $321,450
32%	$160,726 to $204,100	$321,451 to $408,200

Lisa and Fred, a married couple

Step 1:

Lisa tax liability on income of $200,000

=9700*10%+(39475-9700)*12%+(84200-39475)*22%+(160725-84200)*24%+(200000-160725)*32%

=$45,316.5.

Step 2:

Fred tax liability on income of $100,000

=9700*10%+(39475-9700)*12%+(84200-39475)*22%+(100000-84200)*24%

=$18,174.5.

Step 3:

Joint tax liability on income of $300,000

=19400*10%+(78950-19400)*12%+(168400-78950)*22%+(300000-168400)*24%

=$60,349.

Step 4:

Marriage benefit = Lisa Individual tax + Fred individual tax - Joint filing tax

=$45,316.5+$18,174.5-$60,349

=$3,142

Jasmine and Thomas, a married couple

Step1:

Jasmine tax liability on income of $130,000

=9700*10%+(39475-9700)*12%+(84200-39475)*22%+(130000-84200)*24%

=$25,374.5

Step 2:

Thomas tax liability on income of $15,000

=9700*10%+(15000-9700)*12%

=$1,606

Step 3:

Joint tax liability on income of $145,000

=19400*10%+(78950-19400)*12%+(145000-78950)*22%

=$23,617

Step 4:

Marriage benefit = Jasmine Individual tax + Thomas individual tax - Joint filing tax

=$25,374.5+$1,606-$23,617

=$3,363.

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