Question

Given that Ron and Anne have taxable income of only $24,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2020 assuming they file a joint return

Answer 1

Answer:

$2,485|

Explanation:

married filing jointly tax brackets for 2020 are:

Tax rate        Taxable income bracket         Tax owed

10%              $0 to $19,750                           10% of taxable income

12%              $19,751 to $80,250                 $1,975 plus 12% of the amount

                                                                     over $19,750

Ron and Anne's tax liability = $1,975 + [($24,000 - $19,750) x 12%] = $1,975 + $510 = $2,485