1. Calculate the taxes and average tax rate for a married couple family of four in the 15 percent bracket with a gross income of $63,000 (close to the national median for a family of four) with $4000 in IRA contributions, a standard deduction of $12,600, $16,200 for four exemptions and two child tax credits of $1000 each. You need to show the details of your calculations in order to receive full credit for this question. (Hint: use Table 4-3 to calculate the taxes, and refer to "Advice from a Seasoned Pro" in section 4.1d to see how the average tax rate is calculated.) 2. What is the marginal tax bracket? Explain why some taxpayers have an effective marginal tax rate as high as 40 percent? Does this mean they pay 40% of their taxable income in taxes?
1. Calculate the taxes and average tax rate for a married couple family of four in the 15 percent bracket with a gross income of $63,000 (close to the national median for a family of four) with $4000 in IRA contributions, a standard deduction of $12,600, $16,200 for four exemptions and two child tax credits of $1000 each. You need to show the details of your calculations in order to receive full credit for this question. (Hint: use Table 4-3 to calculate the taxes, and refer to "Advice from a Seasoned Pro" in section 4.1d to see how the average tax rate is calculated.) 2. What is the marginal tax bracket? Explain why some taxpayers have an effective marginal tax rate as high as 40 percent? Does this mean they pay 40% of their taxable income in taxes?
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
9th Edition
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter3: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 8P: PERSONAL TAXES Susan and Stan Britton are a married couple who file a joint income tax return, where...
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1. Calculate the taxes and average tax rate for a married couple family of four in the 15 percent bracket with a gross income of $63,000 (close to the national median for a family of four) with $4000 in IRA contributions, a standard deduction of $12,600, $16,200 for four exemptions and two child tax credits of $1000 each. You need to show the details of your calculations in order to receive full credit for this question. (Hint: use Table 4-3 to calculate the taxes, and refer to "Advice from a Seasoned Pro" in section 4.1d to see how the average tax rate is calculated.)
2. What is the marginal tax bracket? Explain why some taxpayers have an effective marginal tax rate as high as 40 percent? Does this mean they pay 40% of their taxable income in taxes?
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