A major overhaul of the Federal Tax structure was enacted at the end of 2017, ef
ID: 2527935 • Letter: A
Question
A major overhaul of the Federal Tax structure was enacted at the end of 2017, effective beginning with the 2018 tax year. This assignment consists of calculations to gauge effects on situations as described.
In all cases, for this assignment, assume that the tax being calculated is for a “Married couple filing jointly” who do not itemize deductions, and have no other additions, subtractions, or any tax situations not specifically stated. Complete the table below, finding the difference between the tax due in 2016 and 2018 (all numbers should be rounded to whole dollars). When your table is complete, save this document and either submit it as an attachment via email or turn in a hard copy in class – this assignment is due no later than Monday, April 23rd.
Up to (8) “extra credit” points will be added to your score for Current Event Assignment #2.
income
40,000
120,000
500,000
total no of additional dependents
0
3
2
dependents under 17
0
1
2
2016
standard deduction amount
2016
dollar amount of exemptions
2016
taxable income
2016
gross tax amount
2016
child tax credit amount
2016
final amount of tax due
2018
standard deduction amount
2018
dollar amount of exemptions
2018
taxable income
2018
gross tax amount
2018
child tax credit amount
2018
final amount of tax due
difference in amount of tax due, 2018 vs 2016
income
40,000
120,000
500,000
total no of additional dependents
0
3
2
dependents under 17
0
1
2
2016
standard deduction amount
2016
dollar amount of exemptions
2016
taxable income
2016
gross tax amount
2016
child tax credit amount
2016
final amount of tax due
2018
standard deduction amount
2018
dollar amount of exemptions
2018
taxable income
2018
gross tax amount
2018
child tax credit amount
2018
final amount of tax due
difference in amount of tax due, 2018 vs 2016
Explanation / Answer
Income
40,000
120,000
500,000
Total no of additional dependents
0
3
2
dependents under 17
0
1
2
2016
standard deduction amount
12,600
12,600
12,600
2016
dollar amount of exemptions
8,100
20,250
16,200
2016
taxable income
19,300
87,150
471,200
2016
gross tax amount
1968
13,330
132,262
2016
child tax credit amount
0
950
1950
2016
final amount of tax due
1,968
12,380
130,312
2018
standard deduction amount
12,700
12,700
12,700
2018
dollar amount of exemptions
8,100
20,250
16,200
2018
taxable income
19200
87,050
471,100
2018
gross tax amount
1948
13,240
131,786
2018
child tax credit amount
0
950
2018
final amount of tax due
1948
12,290
130836
difference in amount of tax due, 2018 vs 2016
20
90
524
Tax Computation
Tax Bracket for the Year 2016
$0 - $18550......10%
$18851 - $75,300......15%
$75,301 - $151,900....25%
$151,901 - $231,450....28%
$231,451 - $413,350....33%
$413,351 - $466,950....35%
$466,951 and above....39.6%
Tax Bracket for 2018
Note : Tax is computed on the basis of available informartion. Information that is not given is assumed.
Due to limitation, the maximum possible working notes that can be shown are provided. However if you need any clarification or explanation on any matters , please let me know.
Income
40,000
120,000
500,000
Total no of additional dependents
0
3
2
dependents under 17
0
1
2
2016
standard deduction amount
12,600
12,600
12,600
2016
dollar amount of exemptions
8,100
20,250
16,200
2016
taxable income
19,300
87,150
471,200
2016
gross tax amount
1968
13,330
132,262
2016
child tax credit amount
0
950
1950
2016
final amount of tax due
1,968
12,380
130,312
2018
standard deduction amount
12,700
12,700
12,700
2018
dollar amount of exemptions
8,100
20,250
16,200
2018
taxable income
19200
87,050
471,100
2018
gross tax amount
1948
13,240
131,786
2018
child tax credit amount
0
950950
2018
final amount of tax due
1948
12,290
130836
difference in amount of tax due, 2018 vs 2016
20
90
524
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