Problem 3-42 (Algorithmic) (LO. 5, 6, 9) David and Ruby are engaged and plan to
ID: 2814029 • Letter: P
Question
Problem 3-42 (Algorithmic) (LO. 5, 6, 9)
David and Ruby are engaged and plan to get married. During 2018, David is a full-time student and earns $8,500 from a part-time job. With this income, student loans, savings, and nontaxable scholarships, he is self-supporting. For the year, Ruby is employed and has wages of $76,900.
Click here to access the standard deduction table to use. Click here to access the Tax Rate Schedules. If an amount is zero, enter, "0". Do not round your intermediate computations. Round your final answer to nearest whole dollar.
a. Compute the following:
b. Assume that David and Ruby get married in 2018 and file a joint return. What is their taxable income and income tax? Round your final answer to nearest whole dollar.
c. How much income tax can David and Ruby save if they get married in 2018 and file a joint return?
$
Filing Single Ruby
Filing Single Gross income and AGI $ $ Standard deduction Taxable income $ $ Income tax $
$
Explanation / Answer
Individual Returns a. Computation of Tax Laibility David Ruby Filing Single Filing Single Gross income and AGI Standard deduction 8500 76900 Taxable income 12000 12000 Income tax 0 64900 0 10217.5 b. Married & file a Joint return. Gross income 85400 Standard deduction 24000 Taxable income 61400 Income tax 9447.5 c. Income tax David and Ruby can save if they get married in 2018 and file a joint return 10217.5-9447.5= 770
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