Question

Jake and Gloria are married, filing jointly. Their taxable income without deductions was $406,498. They were able to reduce their total income by $25,381 with deductions. Using Form 1040 and Schedule A, how much was their tax by taking these deductions? Use the schedule below.

Answer 1

Jake and Gloria's tax owed after deductions is $146,150.70.

Step-by-step explanation:

To calculate the tax amount after deductions, we need to determine the taxable income after the deductions have been subtracted. In this case, Jake and Gloria had a taxable income without deductions of $406,498 and were able to reduce their total income by $25,381 with deductions. Therefore, their taxable income after deductions is $406,498 - $25,381 = $381,117.

Using the tax schedule provided, we find that the tax owed by a single individual with a taxable income of $381,117 falls into the tax bracket of $194,301 - $414,700. According to the table, the tax owed for this bracket is $54,380 plus 35% of the amount over $194,301.

To calculate the tax owed by Jake and Gloria, we start with the tax owed for the $194,301 - $414,700 bracket, which is $54,380. Then, we add 35% of the amount over $194,301, which is ($381,117 - $194,301) * 35%. Finally, we sum these two amounts to get the total tax owed: $54,380 + ($381,117 - $194,301) * 35% = $146,150.70.