Kim and Kanye have been dating for years and are now thinking about getting married. As a financially sophisticated couple, they want to think through the tax implications of their potential union.

Suppose Kim and Kanye both earn $70,000 (so their combined income is $140,000). Using the tax bracket information in Table 1.2 (or the Excel file available on MyFinanceLab with the same information), calculate the combined tax bill that they would pay if they remain single, and compare that to taxes they would pay if they were married and filed a joint return.

Now suppose that Kim and Kanye both earn $100,000 (so their combined income is $200,000). Calculate the combined tax bill that they would pay if they remain single, and compare that to the taxes that they would pay if they were married and filed a joint return.

What differences do you find in parts (a) and (b)? What is the cause of these differences?

Table 1.2

Taxable Income

Tax Rates	Individual Return	Joint Returns
10.0%	$0 to $9,075	$0 to $18,150
15.0%	$9,076 to $36,900	$18,151 to $73,800
25.0%	$36,901 to $89,350	$73,801 to $148,850
28.0%	$89,351 to $186,350	$148,851 to $226,850
33.0%	$186,351 to $405,100	$226,851 to $405,100
35.0%	$405,101 to $406,750	$405,101 to $457,600
39.6%	Over $406,750	Over $457,600