The millers, a family of three filing joint returns, have the following informat

Question

The millers, a family of three filing joint returns, have the following information to prepare their federal income tax. Use the current federal tax forms (available at the local IRS office) to make your computation.

Salaries- 65,000

Interest income, corporate bonds- 1,000

Interest income, municipal bonds (issued in 1984)- 1,500

State and local income taxes- 800

Real estate taxes- 750

General sales taxes-750

Home mortgage interest-3,350

Credit Card interest- 500

Cash contributions to charities-250

Interest on education loans- 500

Hospital and doctor expenses- 1,500

Compute the following:

A. Adjsted Gross income

B. Taxable income

C. Tax

D. Average tax rate

E. Average effective-tax rate

F. Marginal tax rate

Explanation / Answer

A - 65000 + 1000 + 1500 = 67500

B - 65000 - 250 = 64750

C - 800 + 750 + 750 = 2300

D - 3.55%

E - 3.55%

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