During 2018, the Smiths and the Joneses both filed joint tax returns. For the tax year ended December 31, 2018, the Smiths' taxable income was $130,000, and the Joneses had total taxable income of $65,000. a. Using the federal tax rates given in Table 1.2 for married couples filing joint returns, calculate the taxes for both the Smiths and the Joneses family. b. Calculate and compare the ratio of the Smiths' to the Joneses' taxable income and the ratio of the Smiths' to Joneses' taxes. What does this demonstrate about the federal tax structure?
During 2018, the Smiths and the Joneses both filed joint tax returns. For the tax year ended December 31, 2018, the Smiths' taxable income was $130,000, and the Joneses had total taxable income of $65,000. a. Using the federal tax rates given in Table 1.2 for married couples filing joint returns, calculate the taxes for both the Smiths and the Joneses family. b. Calculate and compare the ratio of the Smiths' to the Joneses' taxable income and the ratio of the Smiths' to Joneses' taxes. What does this demonstrate about the federal tax structure?
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 26CE
Related questions
Question
During 2018, the Smiths and the Joneses both filed joint tax returns. For the tax year ended December 31, 2018, the Smiths' taxable income was $130,000, and the Joneses had total taxable income of $65,000.
a. Using the federal tax rates given in Table 1.2 for married couples filing joint returns, calculate the taxes for both the Smiths and the Joneses family.
b. Calculate and compare the ratio of the Smiths' to the Joneses' taxable income and the ratio of the Smiths' to Joneses' taxes. What does this demonstrate about the federal tax structure?
Table 1.2
Taxable Income | ||
---|---|---|
Tax Rates | Individual Returns | Joint Returns |
10% | $0 to $9,525 | $0 to $19,050 |
12% | $9,526 to $38,700 | $19,051 to $77,400 |
22% | $38,701 to $82,500 | $77,401 to $165,000 |
24% | $82,501 to $157,500 | $165,001 to $315,000 |
32% | $157,501 to $200,000 | $315,001 to $400,000 |
35% | $200,001 to $500,000 | $400,001 to $600,000 |
37% | Over $500,000 | Over $600,000 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT