Question

In: Accounting

Joseph and Maxie Stottlemyre are married and filing a joint tax return. Their taxable incomes for...

Joseph and Maxie Stottlemyre are married and filing a joint tax return. Their

taxable incomes for the year were $27,522 (Joseph) and $24,074 (Maxie). Their

W-2 forms show that they already have paid $8315in income taxes for the year.

Are they correct in assuming that they will receive a tax refund? If so, how much

will it be? Otherwise, how much will they still owe?

(10) 11. Would Joseph and Maxie have paid more or less tax if they had each filed

separately? By what amount?

Expert Solution

Calculation for tax liability when they filed joint tax return :-

Total taxable income = $ 27,522 + $ 24,074 = $ 51,596

Range of income	Tax bracket	Tax liability
$ 0 - $ 19,400	10%	$ 1,940
$ 19,401 - $ 51,596	12%	$ 3,864
Actual tax liability	$ 5,804

Paid income tax as per W 2 = $ 8,315

Less: Actual tax liability. = $ 5,804

Net Tax refund amount = $ 2,511

If they filed separately then following will be their tax liability :

Joseph	Maxie
Range of income	Tax bracket	Tax liability	Range of income	Tax bracket	Tax liability
$ 0 - $ 9,700	10%	$ 970	$ 0 - $ 9,700	10%	$ 970
$ 9,701- $ 27,522	12%	$ 2,139	$ 9,701 - $ 24,074	12%	$ 1,725
Actual tax liability	$ 3,109	Actual tax liability	$ 2,695

Total actual tax liability if they filed separately = $ 3,109 + $ 2,695 = $ 5,804

So, if they filed separately then they don't have to pay more or less amount of tax [ $ 5,804 - $ 5,804 = $ 0] in comparison with actual tax liability if they filed jointly .

ekkarill92 answered 1 year ago

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