Question

In: Accounting

In 2017, Jasmine and Thomas, a married couple, had taxable income of $150,000. If they were...

In 2017, Jasmine and Thomas, a married couple, had taxable income of $150,000. If they were to file separate tax returns, Jasmine would have reported taxable income of $140,000 and Thomas would have reported taxable income of $10,000. Use Tax Rate Schedule for reference.

What is the couple’s marriage penalty or benefit? (Do not round intermediate calculations. Round your answer to 2 decimal places. Input the amount as positive value.)

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Expert Solution

Answer

Married Couple

Taxable Income

Tax if jointly filed

Tax if single

Jasmine

                 140,000

     32,181.75

Thomas

                   10,000

       1,033.75

Jointly

                 150,000

                 28,977.50

     33,215.50

Tax on Jointly Filed = $10452.5 + 25%* (150000-75900)

= 28,977.50

Tax if filed separately

Jasmine = $18713.75 + 28%* (140000-91900)

= $32,181.75

Thomas = $932.5 + 15%* (10000-9325)

= $1,033.75

Marriage benefit = $4,238 (33,215.50 - 28,977.50)


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