Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. The Millers, a family of four (with two young child) filing a joint tax return, have the following information to prepare their federal income

image text in transcribed
1. The Millers, a family of four (with two young child) filing a joint tax return, have the following information to prepare their federal income tax return for 2018: Total Income State and local income taxes State and local property tax Home mortgage interest Contribution to charities Interest on student loans Contribution to 401(k) retirement account: Contribution to individual retirement account: $120,000 $6,000 $6,000 $12,000 $4,000 $2,000 $8,000 $4,000 For tax year 2018: Standard deduction for a married couple: $24,000; Child tax credit: $2,000 per child; The tax brackets, which apply to the Millers, are: for taxable income from $0 to $30,000, the tax rate is 10%; from $30,000 to $70,000, the tax rate is 20%; from $70,000 to $120,000, the ta rate is 30%. (5 points) Please compute the following for tax year for the Miller family: A) Adjusted gross income; B) Taxable income; C) Tax owed to the federal government; D) Marginal tax rate; and E) Average tax rate. (1 point) If this family's income increases by $1,000 in 2019, and if all other information remains the same (for the sake of simplicity) in 2019, how much will this family's federal income tax increase by in 2019? Please use the marginal tax rate concept to answer this

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions