Consider the followingcouple, who are engaged to be married. Assume that each person takes one exemption and the standard deduction. Answer the questions below using the tax rates in the table to the right.

Rebecca & Todd have adjusted gross incomes of $96,600 & $82,900, respectively.

Tax Rate Single Married Filing Jointly

10% up to $9325 up to $18,650

15% up to $37,950 up to $75,900

25% up to $91,900 up to $153,100

28% up to $191,650 up to $233,350

33% up to $416,700 up to $416,700

35% up to $418,400 up to $470,700

39.6% above $418,400 above $470,700

Standard deduction $6350 $12,700

Exemption

(per person) $4050 $4050

3. questions to this problem.

A.

Calculate their income tax if they delay their marriage until next year so they can file their tax returns as individuals at the single tax rate this year.

Their income tax would be nothing.

$_________________

(Round to the nearest dollar asneeded.)

B.

Calculate their income tax if they marry before the end of this year and file a joint return.

Their income tax would be nothing.

$_____________________

(Round to the nearest dollar asneeded.)

C.

Does the couple face a marriage penalty if they marry before the end of the year? (Married rates apply for the entire year, regardless of when during the year the marriage took place.) Choose the correct answer below.

A.

No, they do not , as the amount they would pay as a couple is more than the amount they would owe by filing at a single tax rate.

B.

Yes, they do , as the amount they would pay as a couple is more than the amount they would owe by filing at a single tax rate.

C.

Yes, they do , as the amount they would pay as a couple is less than the amount they would owe by filing at a single tax rate.

D.

No, they do not, as the amount they would pay as a couple is less than the amount they would owe by filing at a single tax rate.

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