Susan and Stan Britton are a married couple who file a joint income tax return, where the tax rates are based on the tax table 3.5. Assume that their taxable income this year was$198,000. Do not round intermediate calculation.a. What is their federal tax liability? Round your answer to the nearest dollar.$b. What is their marginal tax rate? Round your answer to the nearest whole number.%c. What is their average tax rate? Round your answer to two decimal places.% Single IndividualsIf Your TaxableIncome IsUp to $9,875$9,875-$40,125$40,125-$85,525If Your TaxableIncome IsYou Pay ThisAmount on theBase of the Bracket$$85,525-$163,300$163,300-$207,350$207,350-$518,400Over $518,400Married Couples Filing Joint ReturnsUp to $19,750$19,750-$80,250$80,250-$171,050$171,050-$326,600$326,600-$414,700$414,700-$622,050Over $622,0500.00987.504,617.5014,605.5033,271.5047,367.50156,235.00You Pay ThisAmount on theBase of the Bracket$ 0.001,975.009,235.0029,211.0066,543.0094,735.00167,307.50Plus This Percentageon the Excess overthe Base (Marginal Rate)10.0%12.022.024.032.035.037.02020 Individual Tax RatesPlus This Percentageon the Excess over theBase (Marginal Rate)10.0%12.022.024.032.035.037.0Average TaxRate at Topof Bracket10.0%11517.120.422.830.137.0Average TaxRate atTop of Bracket10.0%11.517.120.422.826.937.0Notes:1. These are the 2020 tax rates that will be paid on tax returns due April 15, 2021. The income ranges atwhich each tax rate takes effect are indexed with inflation, so they change each year.2. The average tax rates are always below the marginal rates, but in 2020 the average at the top of thebrackets approaches 37% as taxable income rises without limit.3. In 2018, the personal exemption for the taxpayer and dependents was eliminated. With the deductionlimitation on state and local property, income, and sales taxes and the existence of payroll taxes (SocialSecurity and Medicare taxes), the 2020 effective tax rate will be higher than 37%.TABLE 3.5

Tax liability appears to be the sum of money or obligations that an individual or business is…

Answered: Susan and Stan Britton are a married…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Jorge and Anita, married taxpayers, earn $155,600 in taxable income and $41,400 in interest from an investment in City of Heflin bonds. Using the U.S. tax rate schedule for married filing jointly, how much federal tax will they owe? What is their average tax rate? What is their effective tax rate? What is their current marginal tax rate? Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Use the marginal tax rates in the table below to compute the tax owed in the following situation. The tax owed is S (Simplify your answer. Round to the nearest dollar as needed.) Marco is married filing separately with a taxable income of $67,900. Tax Rate 10% 15% 25% 28% 33% 35% 39.6% Standard deduction Exemption (per person) Married Filing Separately up to $9325 up to $37,950 up to $76,550 up to $116,675 up to $208,350 up to $235,350 above $235,350 $6350 $4050
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Determine the taxable amount of Social Security benefits for the following situations. If required, round your answers to the nearest dollar. If an amount is zero, enter "0". a. Tyler and Candice are married and file a joint tax return. They have adjusted gross income of $39,400 before considering their Social Security benefits, no tax-exempt interest, and $13,790 of Social Security benefits. As a result, $ of the Social Security benefits are taxable. b. Assume Tyler and Candice have adjusted gross income of $15,800 before considering their Social Security benefits, no tax-exempt interest, and $17,380 of Social Security benefits. As a result, $ 8,490 X of the Social Security benefits are taxable. c. Assume Tyler and Candice have adjusted gross income of $104,500 before considering their Social Security benefits, no tax-exempt interest, and $15,675 of Social Security benefits. As a result, 96,338 X of the Social Security benefits are taxable.

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