Use the following tax rates and income brackets for 2015 to answer the question.

Question

Use the following tax rates and income brackets for 2015 to answer the question. Tax Rates Individual Returns Joint Returns 10% $0 to $9075 $0 to 18150 15% $9076 to 36900 $18151 to 73800 25% $36901 to 89350 $73801 to 148850 28% $89351 to 186350 $148851 to 226850 33% $186351 to 405100 $226851 to 405100 35% $405101 to $406750 $405101 to 457600 In 2015, John and Nicole earned a combined taxable income of $148,800 from employment plus $1,000 in long term capital gains and they file a joint tax return. What is their total federal income tax? Round to the nearest dollar.

Explanation / Answer

Answer:

Total taxable income = 148,800 + 1,000 = 149,800 under joint return

We need to use joint return tax slab

Tax = 18,150 * 0.10 + (73,800 - 18,150)*0.15 + (148,850 - 73,800)*0.25 + (149,800 - 148,850)*0.28

Tax = 29,191

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