Assume that Dustin is a civil engineer earning $63,300 in wages and $1895 in int

Question

Assume that Dustin is a civil engineer earning $63,300 in wages and $1895 in interest savings. He made $2750 in tax-deferred contributions to a 401(k) retirement account, qualifying for the standard deduction and personal exemption by filing as a single tax payer. Using the 2013 Marginal Tax Rate table from your textbook, compute in the FICA, federal income, total taxes and overall tax rate for Dustin.

Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the 15% marginal rate affects income starting at $8915, which is where the 10% rate leaves off, and continuing up to $34,250. This table tomes the effects of (i) exemption and deduction phase-outs that apply to high income tax payers and (ii) the alternative minimum tax (AMT) that affects many middle and high income taxpayers

Explanation / Answer

total earnings are $65,195

the total tax deductions is= 10% upto 8,925=892.5

15% upto 36,250=27,325X15%= 4,098.75

25% upto 87,850= 28945X25%= 7,236.25

total tax payment is = 12,227.5

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