.oooo AT&T; 12:52 PM Income taxes are the chief source of revenue for the federa

Question

.oooo AT&T; 12:52 PM Income taxes are the chief source of revenue for the federal government. If you are employed, your employer probably withholds some money from each of your paychecks for federal income tax. At the end of each year, your employer sends you a Wage and Tax Statement Form (W-2 form), which states the amount of money you withheld for taxes. earned that y ear and how much was Every employee is required by law to prepare an income tax return by April 15 of each year and send it to the Internal Revenue Service (IRS). On the income tax return, you must report your total income, or gross income. Then you subtract from the gross income any adjustments (such as deductions for charitable contributions or exemptions for people who are dependent on your income) to determine your adjusted gross income. You use your adjusted gross income and either a tax table or a tax rate schedule to determine your tax liability, or the amount of income you owe to the federal government After calculating your tax liability, compare it with the amount withheld for federal income tax, as shown on your W-2 form. If the tax liability is less than the amount withheld, you are entitled to a tax refund. If the tax liability is greater than the amount withheld, you owe the IRS money; you have a balance due The 2009 Tax Rate Schedules table is shown below. To use this table for the exercises that follow, first classify the taxpayer as single, married filing jointly, or married filing separately. Then determine into which range the adjusted gross income falls. Then perform the calculations shown to the right of that range to determine the tax liability For example, consider a taxpayer who is single and has an adjusted gross income of $48,720. To find this taxpayer's tax liability, use the portion of the table headed "Schedule X" for taxpayers whose filing status is single. An income of $48,720 falls in the range $33,950 to $82,250. The tax is 4675 + 25% of the amount over $33,950. Find the amount over $33,950. 48,720-$33,90 $14,770 Calculate the tax liability. The taxpayer's liability is $8367.50 2009 Tax Rate Schedules Schedude X-If your filing seatuns is Single 18 350 2,250 171,550

Explanation / Answer

Joseph Abruzzio is married and filing separately. His adjusted gross income is $ 66350. As per the schedule Y-2, this amount falls in the bracket $33950- $ 68525. The tax is $ 4675 + 25 % of the amount over $ 33950. Now, the amount over $ 33950 is $ 66350 - $ 33950 = $ 32400. Then Josph's tax liability is $ 4675 + 25 % of $ 32400 = $ 4675 + $ 8100 = $ 12775.

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