Question

8. Using the following tax table, how much would a married couple, filing jointly, owe on a taxable income of $151,000?Tax RateSingle or Married Filing SeparatelyMarried Filing JointlyHead of Household10%up to $9,875up to $19,750up to $14,10012%$9,875 to $40,125$19,750 to $80,250$14,100 to $53,70022%$40,125 to $85,525$80,250 to $171,050$53,700 to $85,50024%$85,525 to $163,300$171,050 to $326,600$85,500 to $163,30032%$163,300 to $207,350$326,600 to $414,700$163,300 to $207,35035%$207,350 to $518,400$414,700 to $622,050$207,350 to $518,40037%more than $518,400more than $622,050more than $518,400Standard Deduction$12,400$24,800$18,650$

Answer 1

Given that a taxpayer income is $151,000

It can be observed that the taxpayer is married filing jointly.

The income of the taxpayer falls between $80,250 to $171,050

The tax rate at this point is 22%

The standard deduction is $24,800

The taxable income can be calculated using the formula below

$\text{Taxable income = Income - deductions}$

Using the above data, our taxpayer's taxable income is

$\begin{gathered} \text{Taxable income=\ 151000-\ 24800} \\ =126200 \end{gathered}$

It can be seen that the calculated taxable income is $126,200

The tax paid is calculated by the formula below

$\text{Tax}=\text{Taxable income}\times tax\text{ rate}$

The tax that is required to be paid on the taxable income would be

$\begin{gathered} \text{Tax}=((19750-0)\times10\text{ \%)}+((80250-19750)\times12\text{ \%)} \\ +\text{(126200-80250)}\times22\text{ \%)} \\ \text{Tax}=(19750\times0.1)+(60500\times0.12)+(45950\times0.22) \end{gathered}$$\begin{gathered} \text{Tax}=(1975+7260+10109) \\ \text{Tax}=19344 \end{gathered}$

Hence, the tax expected to pay is $19,344