Question

Leonardo, who is married but files separately, earns $170,000 of taxable income. He also has $14,750 in city of Tulsa bonds. His wife, Theresa, earns $82,000 of taxable income. If Leonardo and his wife file married filing jointly in 2018, what would be their effect tax rate (rounded)?

Answer 1

According to the question give above, Please refer to the calculations below:

Calculation of taxable Income

Leonardo's taxable Income=$170,000

(Leonardo also has $14,750 in city of Tulsa bonds is tax exempt)

Theresa's taxable Income=$82,000

Total Taxable Income-252,000

Calculation of tax obligation (2018)

Leonardo's tax obligation=$54,400 ($170,000*32%)-In a tax bracket of 32% as the income falls between($157,500-$200,000)

Theresa's tax obligation-$19,680 ($82000*24%)-In a tax bracket of 24% as the income falls between ($82,500-$157,500)

Total Tax Obligation=$74,080

Effective tax rate=Total Tax obligation/Total Taxable income

=$74,080/$252,000

=29.396%

=29.40%(rounded form)