Question

A major overhaul of the Federal Tax structure was enacted at the end of 2017, effective beginning with the 2018 tax year. This assignment consists of calculations to gauge effects on situations as described.

In all cases, for this assignment, assume that the tax being calculated is for a “Married couple filing jointly” who do not itemize deductions, and have no other additions, subtractions, or any tax situations not specifically stated. Complete the table below, finding the difference between the tax due in 2016 and 2018 (all numbers should be rounded to whole dollars). When your table is complete, save this document and either submit it as an attachment via email or turn in a hard copy in class – this assignment is due no later than Monday, April 23^rd.

Up to (8) “extra credit” points will be added to your score for Current Event Assignment #2.

	income	40,000	120,000	500,000
	total no of additional dependents	0	3	2
	dependents under 17	0	1	2
2016	standard deduction amount
2016	dollar amount of exemptions
2016	taxable income
2016	gross tax amount
2016	child tax credit amount
2016	final amount of tax due
2018	standard deduction amount
2018	dollar amount of exemptions
2018	taxable income
2018	gross tax amount
2018	child tax credit amount
2018	final amount of tax due
difference in amount of tax due, 2018 vs 2016

Answer 1

	Income	40,000	120,000	500,000
	Total no of additional dependents	0	3	2
	dependents under 17	0	1	2
2016	standard deduction amount	12,600	12,600	12,600
2016	dollar amount of exemptions	8,100	20,250	16,200
2016	taxable income	19,300	87,150	471,200
2016	gross tax amount	1968	13,330	132,262
2016	child tax credit amount	0	950	1950
2016	final amount of tax due	1,968	12,380	130,312
2018	standard deduction amount	12,700	12,700	12,700
2018	dollar amount of exemptions	8,100	20,250	16,200
2018	taxable income	19200	87,050	471,100
2018	gross tax amount	1948	13,240	131,786
2018	child tax credit amount	0	950	950
2018	final amount of tax due	1948	12,290	130836
difference in amount of tax due, 2018 vs 2016		20	90	524

Tax Computation

Tax Bracket for the Year 2016

$0           -   $18550......10%

$18851   -    $75,300......15%

$75,301 -    $151,900....25%

$151,901 - $231,450....28%    

$231,451 - $413,350....33%    

$413,351 - $466,950....35%

$466,951 and above....39.6%     

Tax Bracket for 2018

10%	Up to $19,050
12%	$19,051 to $77,400
22%	$77,401 to $165,000
24%	$165,001 to $315,000
32%	$315,001 to $400,000
35%	$400,001 to $600,000
37%	$600,001 or more

  

Note : Tax is computed on the basis of available informartion. Information that is not given is assumed.

Due to limitation, the maximum possible working notes that can be shown are provided. However if you need any clarification or explanation on any matters , please let me know.