A married couple with no children has the following in year 2012: The husband ha
ID: 2716247 • Letter: A
Question
A married couple with no children has the following in year 2012:
The husband has an AGI of $65,000 and allowable itemized deductions of $10,800.
The wife has an AGI of 58,000, and allowable itemized deductions of $800.
Year 2012 federal tax brackets, personal exemption and standard deductions are given below.
2012 Tax Rates & Tax Brackets
Tax Rate
Single
Married Filing Joint
Married Filing Separate
Head of Household
10%
Up to $8,700
Up to $17,400
Up to $8,700
Up to $12,400
15%
$8,701 – $35,350
$17,401 – $70,700
$8,701 – $35,350
$12,401 – $47,350
25%
$35,351 – $85,650
$70,701 – $142,700
$35,351 – $71,350
$47,351 – $122,300
28%
$85,651 – $178,650
$142,701 – $217,450
$71,351 – $108,725
$122,301 – $198,050
33%
$178,651 – $388,350
$217,451 – $388,350
$108,726 – $194,175
$198,051 – $388,350
35%
Over $388,350
Over $388,350
Over $194,175
Over $388,350
Standard Deduction:
$5,950 $11,900 $5,950 $8,700
Personal Exemption: $3,800/person
(a) Compute the couple’s 2012 federal income tax, if they file their federal taxes jointly
$16,469
(b) Compute the couple’s 2012 federal income tax, if they file their federal taxes separately
$16,723
$17,431
$16,108
$18,004
Tax Rate
Single
Married Filing Joint
Married Filing Separate
Head of Household
10%
Up to $8,700
Up to $17,400
Up to $8,700
Up to $12,400
15%
$8,701 – $35,350
$17,401 – $70,700
$8,701 – $35,350
$12,401 – $47,350
25%
$35,351 – $85,650
$70,701 – $142,700
$35,351 – $71,350
$47,351 – $122,300
28%
$85,651 – $178,650
$142,701 – $217,450
$71,351 – $108,725
$122,301 – $198,050
33%
$178,651 – $388,350
$217,451 – $388,350
$108,726 – $194,175
$198,051 – $388,350
35%
Over $388,350
Over $388,350
Over $194,175
Over $388,350
Explanation / Answer
HUSBAND'S AGI=$65,000
ALLOWABLE ITEMISED DEDUCTION=$10,800
WIFE'S AGI=$58,000
ALLOWABLE ITEMISED DEDUCTION=$800
(a)THE COUPLE'S 2012 FEDERAL INCOME TAX IF THEY FILE FEDERAL TAXES JOINTLY
TOTAL AGI =$65,000+$58,000 =$1,23,000
LESS:ALLOWABLE ITEMISED DEDUCTION=$10,800+$800=$11,600
LESS:STANDARD DEDUCTION =$5,950
LESS:PERSONAL EXEMPTION=$3,800*2 =$7,600
TAXABLE INCOME =$97,850
FEDERAL INCOME TAX:
UPTO $17,400@10% =$1,740
$17,401 TO $70,700@15% =$7,995
$70,701 TO $97,850@25% =$6,788
TOTAL FEDDERAL INCOME TAX=$16,523
(b)THE COUPLE'S 2012 FEDERAL INCOME TAX IF THEY FILE FEDERAL TAXES SEPARATELY
AGI =$1,23,000
LESS:ALLOWABLE ITEMISED DEDUCTION=$11,600
LESS:STANDARD DEDUCTION =$11,900
LESS:PERSONAL EXEMPTION =$7,600
TAXABLE INCOME =$91,900
FEDERAL INCOME TAX
UPTO $8,700@10% =$870
$8,701 – $35,350@15% =$3,998
$35,351 – $71,350@25% =$9,000
$71,351-$91,900@28% =$5,754
TOTAL FEDERAL INCOME TAX PAYABLE=$19,622
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