2016 Marginal Tax RatesTax Rate10%15%25%28%33%35%39.6%Unmarried, divorced,or legally separatedSingleup to $9275$9276 to $37,650$37,651 to $91,150$91,151 to $190,150$190,151 to $413,350$413,351 to $415,050more than $415,050$6300StandardDeductionExemptions $4050Married and each partnerfiles a separate tax returnMarried and bothpartners file a singletax returnMarried Filing Separately Married Filing Jointlyup to $9275$9276 to $37,650$37,651 to $75,950$75,951 to $115,725$115,726 to $206,675$206,676 to $233,475more than $233,475$6300up to $18,550$18,551 to $75,300$75,301 to $151,900$151,901 to $231,450$231,451 to $413,350$413,351 to $466,950more than $466,950$12,600$4050$4050Unmarried and payingmore than half the costof supporting a childor parentHead of Householdup to $13,250$13,251 to $50,400$50,401 to $130,150$130,151 to $210,800$210,801 to $413,350$413,351 to $441,000more than $441,000$9300$4050 Use the 2016 marginal tax rates to compute the tax owed by the following couple.A married couple filing jointly with a taxable income of $388,000 and a $6000 tax creditClick the icon to view the 2016 marginal tax rates.The tax owed is $(Type an integer or a decimal. Round to the nearest cent as needed.)

Answered: Use the 2016 marginal tax rates to…

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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2016 Marginal Tax Rates
Tax Rate
10%
15%
25%
28%
33%
35%
39.6%
Unmarried, divorced,
or legally separated
Single
up to $9275
$9276 to $37,650
$37,651 to $91,150
$91,151 to $190,150
$190,151 to $413,350
$413,351 to $415,050
more than $415,050
$6300
Standard
Deduction
Exemptions $4050
Married and each partner
files a separate tax return
Married and both
partners file a single
tax return
Married Filing Separately Married Filing Jointly
up to $9275
$9276 to $37,650
$37,651 to $75,950
$75,951 to $115,725
$115,726 to $206,675
$206,676 to $233,475
more than $233,475
$6300
up to $18,550
$18,551 to $75,300
$75,301 to $151,900
$151,901 to $231,450
$231,451 to $413,350
$413,351 to $466,950
more than $466,950
$12,600
$4050
$4050
Unmarried and paying
more than half the cost
of supporting a child
or parent
Head of Household
up to $13,250
$13,251 to $50,400
$50,401 to $130,150
$130,151 to $210,800
$210,801 to $413,350
$413,351 to $441,000
more than $441,000
$9300
$4050

Use the 2016 marginal tax rates to compute the tax owed by the following couple.
A married couple filing jointly with a taxable income of $388,000 and a $6000 tax credit
Click the icon to view the 2016 marginal tax rates.
The tax owed is $
(Type an integer or a decimal. Round to the nearest cent as needed.)

Expert Solution

Step 1

Tax credits are used as a tax for tax reduction in income tax owed by the individual,under IRS rules i;e the tax credit is a deduction on tax liability. Therefore tax credit reduces the tax bill and also if in any case tax credit is more than the tax liability than the excess credit is refundable to the tax payer.

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