PART BTAX CALCULATION 1 Calculate the tax for a married coup

PART B-TAX CALCULATION 1. Calculate the tax for a married couple with taxable income of $80,000, four-personal exemptions (self, spouse, and two children), and $23,000 of itemized deductions (State and real estate taxes $13,000, mortgage interest $10,000). How much would you owe in taxes under the old rates in 2017 and now in 2018 under the new Tax Act rates? 2. Calculate the tax for a married couple with taxable income of $350,000, four-personal exemptions (self, spouse, and two children), and $43,000 of itemized deductions (State and real estate taxes $23,000, mortgage interest $20,000). How much would you owe in taxes under the old rates in 2017 and now in 2018 under the new Tax Act? 3. What is your opinion of how the Tax Act has impacted individuals with or without children at the different income levels? 2017 $80,000 Adjusted Gross Income Mortgage Interest Sate & Local Taxes Itemized Deductions Exemptions@$4,050 Taxable Income $80,000 $80,000 10% 15% so 10% so 12% SO SO so Total Tax Potential Child Tax Credit SO 2017 $350,000 2018 $240,000 Adjusted Gross Income Mortgage Interest Sate & Local Taxes Itemized Deductions Exemptions@$4,050 Taxable Income $350,000$240,000 10% 15% $0 10% $0 12% s0 22% SO24% $032% SO SO So SO SO SO Total Tax Pot ential Child Tax Credit SO So

Solution

1)

2017

Adjusted Gross Income

$ 80,000.00

Mortgage Interest

     10,000.00

State and Local Taxes

     13,000.00

Itemized Deductions

     23,000.00

Exemption @ 4,050

       8,100.00

Taxable Income

    48,900.00

10%

       1,865.00

15%

       4,537.50

Total Tax

       6,402.50

Potential Child Tax Credit

       2,100.00

Tax Liability

$   4,302.50

2018

Adjusted Gross Income

$              80,000.00

Standard Deductions

                 24,000.00

Exemption @ 4,150

                    8,300.00

Taxable Income

                 47,700.00

10%

                    1,905.00

12%

                    3,582.00

Total Tax

                    5,487.00

Potential Child Tax Credit

                    2,100.00

Tax Liability

$                3,387.00

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2017
Adjusted Gross Income	$ 80,000.00
Mortgage Interest	10,000.00
State and Local Taxes	13,000.00
Itemized Deductions	23,000.00
Exemption @ 4,050	8,100.00
Taxable Income	48,900.00
10%	1,865.00
15%	4,537.50
Total Tax	6,402.50
Potential Child Tax Credit	2,100.00
Tax Liability	$   4,302.50