The family had the following income in 2009: Salaries Mark $63,500 and Ashley $5

Question

The family had the following income in 2009: Salaries Mark $63,500 and Ashley $57,900 Interest on investments: IBM bond $4,750, New York City bond $1,400 and saving account of $2,600 The family made home mortage payment that included interest of $16,480 and paid real estate tax of $4,320 on their home. They also paid state income tax of $5,860 and donated $1,250 to charities. The family have 3 dependent children. a) Calculate the family federal taxable income b) What is their tax liabiltity assuming they file as a married couple c) Calculate their average and calculate marginal tax rate. Accounting

Explanation / Answer

a) federal taxable income = 63500+57900+4750+1400+2600-16480-4320-5860-1250 = 102240 b) tax liability = 10180 c)As of 2011, corporations were taxed at 15 percent for income up to $50,000; at 25 percent for income ranging from $50,000 to $75,000; at 34 percent for taxable income $75,000 to $100,000; at 39 percent for income from $100,000 to $335,000, and so on. So both of their marginal tax rate is 25% mark tax = 0.15*50000 + 0.25*13500 = 18375. So his average tax rate = 18375/63500 = 28.9%. similarly tax of ashley = 0.15*50000+ 0.25*7900 = 16795. so her avg tax rate = 16795/57900 = 29.31%

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