he Tax Formula for Individuals Filing status and Tax Computa

he Tax Formula for Individuals. Filing status and Tax Computation (LO 1.3, 15, ,s, Ln year amounted to $101,900 and they had interest income of $1,750. Diege and Dolores\' deductions for adjusted gress income amounted to $3 ,625 their itemized deductions were $8,050; they claimed two exemptions on their return; and, they filed a joint return Table for the standard deduction Filing Status Single Married, iing jointly Married, fiing separately Head of household Qualfying widower) Click here to access the tax tabies. a. what is the amount of their adjusted gross inceme? 2017 5tandard Deduction 6,350 12,700 6,350 9,350 12,700 b. In order to minimize taxable income, Diego and Dotores wi ( ] in the amount of s t What is the amount of their taxable income? d. What is their ax Rablity for 201

Solution

a) Amount of adjusted gross income = 100025 (101900+1750-3625)

c) Taxable income = 87325 (100025-12700)

d) Tax liability for 2017: Tax Bracket is Married filing Joint 75901 to 153100.

Tax is 10452.50 +25% of amount over 75900

(87325-75900=11425*.25%)  

10452.50+2856.25 = 13308.75