Peter's gross income is $80,000 a year, and Wendy earns $100,000 a year. They put $3,000 each into an IRA. They are a married couple and have two children, so that they can have a child tax credit $2,000 per child. Peter and Wendy decided to file taxes jointly, and this year standard deduction for married taxpayers is $24,400. a. How much is the gross income? b. How much is the adjusted gross income (AGI)? c. How much is the taxable income?
Peter's gross income is $80,000 a year, and Wendy earns $100,000 a year. They put $3,000 each into an IRA. They are a married couple and have two children, so that they can have a child tax credit $2,000 per child. Peter and Wendy decided to file taxes jointly, and this year standard deduction for married taxpayers is $24,400. a. How much is the gross income? b. How much is the adjusted gross income (AGI)? c. How much is the taxable income?
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 70TA
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Transcribed Image Text:Peter's gross income is $80,000 a year, and Wendy earns $100,000 a year. They put $3,000
each into an IRA. They are a married couple and have two children, so that they can have a child
tax credit $2,000 per child. Peter and Wendy decided to file taxes jointly, and this year standard
deduction for married taxpayers is $24,400.
a. How much is the gross income?
b. How much is the adjusted gross income (AGI)?
c. How much is the taxable income?
d. How much do they have to pay in taxes? (Total tax payment)
e. Suppose that the government withheld $16,000 from Peter's earnings and $20,000 from
Wendy's. What is the final payment (refund) due?
Marginal tax rate
if married, filling jointly
37
35
32
24
22
12
10
19,400 78,950
168,400
321,450
408,200
612,350
Taxable Income
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