Renaldo and Rita Hernandez have three children aged 17, 18, and 12. Renaldo's father lives with them and has no income. Renaldo earned a salary of $46,000 during the year. Rita is not employed. They paid $3,200 property tax and $6,330 mortgage interest on their home. They paid $3,000 principal on their mortgage. They paid state income tax of $2,250. They donated $550 to their church and $550 to the Salvation Army. They spent $6,100 on groceries and $1,200 on utilities. They itemize their deductions. Complete the problem, using the exemptions, deductions, and tax rates given in the chapter. (Hint: Use Figure 11-9 and Figure 11-10 to solve the problem.) Round final answers to the nearest dollar.

a. What is their taxable income? $

b. What is their net income tax after credits?

Figure 11-9

Figure 11-10

Figure 11-10 Tax Rate Schedules Schedule X-If your filing status is Single If your taxable income is: The tax is of the amount 8,925 36,250 87,850 183,250 398,350 400,000 But not over $8,925 36,250 87,850 183,250 398,350 400,000 $892.50 + 15% 4,991.25 + 25% 17,891.25 + 28% 44,603.25 + 33% 115,586.25 + 35% 116,163.75 + 39.6% $0 8,925 36,250 87,850 183,250 398,350 400,000 Schedule Y-1-If your filing status is Married filing jointly or Qualifying widow(er) The tax is: income is of the amount over $17,850 $0 17,850 72,500 17,850 72,500 146,400 223,050 398,350 450,000 146,400 223,050 398,350 450,000 $1,785.00 + 15% 9,982.50 + 25% 28,457.50 28% 49,919.50 + 33% 107,768.50 + 35% 125,846.00 + 39.6% 223,050 398,350 450,000 Schedule Y-2-If your filing status is Married filing separately If your taxable income is: The tax is of the amount But not Over $8,925 36,250 73,200 $%0 8,925 36,250 73,200 111,525 199,175 225,000 $892.50 + 15% 4,991.25 + 25% 14,228.75 + 28% 24,959.75 + 33% 53,884.25 + 35% 62,923.00 + 39.6% $0 8,925 36,250 73,200 111,525 199,175 225,000 199,175 225,000 Schedule Z-If your filing status is Head of household The tax is: If your taxable income is of the Over over $12,750 48,600 125,450 $0 12,750 48,600 125,450 203.150 398,350 425,000 $0 $1,275.00 + 15% 6,652.50 + 25% 25,865.00 + 28% 47,621.00 33% 11 2,037.00 + 35% 121,364.50 + 39.6% 48,600 125,450 203,150 398,350 425,000 398,350 425,000