Problem

Use the 2016 marginal tax rates to compute the tax owed by the following couple. A married couple filing jointly with a taxable income of $\$ 314,000$ and a $\$ 6500$ tax credit (1) Click the icon to view the 2016 marginal tax rates. The tax owed is $\$ \square$. (Type an integer or a decimal. Round to the nearest cent as needed.)

Solution

Step 1 :Understand the 2016 marginal tax rates. The tax rates are progressive, meaning that the rate increases as the taxable income increases.

Step 2 :Calculate the tax owed by applying the appropriate tax rate to each portion of the income that falls within each tax bracket, and then summing up these amounts.

Step 3 :Subtract the tax credit from this total to get the final tax owed.

Step 4 :The tax owed by the couple is \(\boxed{72533.0}\) dollars.

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