Please explain the subparts to understand, thank you. Problem #2. Your uncle has a taxable income of $85,311 last year. (a) If he files as a head of household, what is his tax liability. (Use Table 18-3 and example 11 from Chapter 18 as a guide.) (b) What would be your uncle's tax liability if he were to file his taxes as married filing jointly.

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Please explain the subparts to understand, thank you.

Problem #2. Your uncle has a taxable income of $85,311 last year.

(a) If he files as a head of household, what is his tax liability. (Use Table 18-3 and example 11 from Chapter 18 as a guide.)

(b) What would be your uncle's tax liability if he were to file his taxes as married filing jointly.

## Example 11: Using the Tax Rate Tables

Elizabeth Ashcroft had taxable income last year of $121,334. For income tax purposes, she files as married filing separately. Use the appropriate table to calculate her tax liability.

### Solution Strategy

**Step 1**
We’ll use the table for those with filing status "Married filing Separately."

**Step 2**
Reading down the first column, we find Elizabeth’s taxable income in the range “Over $82,500 but not over $157,500.”

**Step 3**
\[ 
\text{Tax} = 14,089.50 + .24(121,334 - 82,500) 
\]
\[ 
= 14,089.50 + .24(38,834) 
\]
\[ 
= 14,089.50 + 9,320.16 
\]
\[ 
= \$23,409.66 
\]

### Try It Exercise 11

Mike Straus had taxable income of $56,500 last year. If he files as single, what is his tax liability?

**Answer**
From the table for single filers:
\[ 
\text{Tax} = 4,453.50 + .22(56,500 - 38,700) 
\]
\[ 
= 4,453.50 + .22(17,800) 
\]
\[ 
= 4,453.50 + 3,916 
\]
\[ 
= \$8,369.50 
\]
Transcribed Image Text:## Example 11: Using the Tax Rate Tables Elizabeth Ashcroft had taxable income last year of $121,334. For income tax purposes, she files as married filing separately. Use the appropriate table to calculate her tax liability. ### Solution Strategy **Step 1** We’ll use the table for those with filing status "Married filing Separately." **Step 2** Reading down the first column, we find Elizabeth’s taxable income in the range “Over $82,500 but not over $157,500.” **Step 3** \[ \text{Tax} = 14,089.50 + .24(121,334 - 82,500) \] \[ = 14,089.50 + .24(38,834) \] \[ = 14,089.50 + 9,320.16 \] \[ = \$23,409.66 \] ### Try It Exercise 11 Mike Straus had taxable income of $56,500 last year. If he files as single, what is his tax liability? **Answer** From the table for single filers: \[ \text{Tax} = 4,453.50 + .22(56,500 - 38,700) \] \[ = 4,453.50 + .22(17,800) \] \[ = 4,453.50 + 3,916 \] \[ = \$8,369.50 \]
### Exhibit 18-3: Income Tax Rate Tables

#### Filing status: Single
**Taxable income** | **Tax**
--- | ---
At least $0 but not over $9,525 | 10% of the amount over $0
Over $9,525 but not over $38,700 | $952.50 + 12% of the amount over $9,525
Over $38,700 but not over $82,500 | $4,453.50 + 22% of the amount over $38,700
Over $82,500 but not over $157,500 | $14,089.50 + 24% of the amount over $82,500
Over $157,500 but not over $200,000 | $32,089.50 + 32% of the amount over $157,500
Over $200,000 but not over $500,000 | $45,689.50 + 35% of the amount over $200,000
Over $500,000 | $150,689.50 + 37% of the amount over $500,000

#### Filing status: Married filing jointly or Qualifying widow(er)
**Taxable income** | **Tax**
--- | ---
At least $0 but not over $19,050 | 10% of the amount over $0
Over $19,050 but not over $77,400 | $1,905 + 12% of the amount over $19,050
Over $77,400 but not over $165,000 | $8,907 + 22% of the amount over $77,400
Over $165,000 but not over $315,000 | $28,179 + 24% of the amount over $165,000
Over $315,000 but not over $400,000 | $64,179 + 32% of the amount over $315,000
Over $400,000 but not over $600,000 | $91,379 + 35% of the amount over $400,000
Over $600,000 | $161,379 + 37% of the amount over $600,000

#### Filing status: Married filing separately
**Taxable income** | **Tax**
--- | ---
At least $0 but not over $9,525 | 10% of the amount over $0
Over $9
Transcribed Image Text:### Exhibit 18-3: Income Tax Rate Tables #### Filing status: Single **Taxable income** | **Tax** --- | --- At least $0 but not over $9,525 | 10% of the amount over $0 Over $9,525 but not over $38,700 | $952.50 + 12% of the amount over $9,525 Over $38,700 but not over $82,500 | $4,453.50 + 22% of the amount over $38,700 Over $82,500 but not over $157,500 | $14,089.50 + 24% of the amount over $82,500 Over $157,500 but not over $200,000 | $32,089.50 + 32% of the amount over $157,500 Over $200,000 but not over $500,000 | $45,689.50 + 35% of the amount over $200,000 Over $500,000 | $150,689.50 + 37% of the amount over $500,000 #### Filing status: Married filing jointly or Qualifying widow(er) **Taxable income** | **Tax** --- | --- At least $0 but not over $19,050 | 10% of the amount over $0 Over $19,050 but not over $77,400 | $1,905 + 12% of the amount over $19,050 Over $77,400 but not over $165,000 | $8,907 + 22% of the amount over $77,400 Over $165,000 but not over $315,000 | $28,179 + 24% of the amount over $165,000 Over $315,000 but not over $400,000 | $64,179 + 32% of the amount over $315,000 Over $400,000 but not over $600,000 | $91,379 + 35% of the amount over $400,000 Over $600,000 | $161,379 + 37% of the amount over $600,000 #### Filing status: Married filing separately **Taxable income** | **Tax** --- | --- At least $0 but not over $9,525 | 10% of the amount over $0 Over $9
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