Final answer:
To find the income tax owed, deduct the total deductions from the gross income to calculate the taxable income, apply the marginal tax rates from 2016 to compute the taxes owed, and subtract any tax credits. The total tax would be the calculated amount minus $2,000 for the given tax credit.
Step-by-step explanation:
To calculate the income tax owed by an unmarried head of household with two dependent children and a gross income of $48,000, we need to consider the marginal tax rates from 2016. First, we add up the deductions, which are $4,234 for state taxes and $4,000 for theft loss, totaling $8,234. We subtract the deductions from the gross income to find the taxable income, which is $48,000 - $8,234 = $39,766.
Next, we use the 2016 marginal tax brackets to calculate the tax owed. Assuming the brackets are similar to the ones provided in the examples, the initial portion of income will be taxed at a lower rate (e.g., 10%), and as income rises, it enters higher tax brackets (e.g., 15%, 25%, etc.). To calculate the exact tax, we would need the specific tax brackets for that year, but for illustrative purposes, if the income was within the 15% bracket, the calculation would be the base tax from the 10% bracket plus 15% of the amount over the 10% threshold.
Finally, we subtract any tax credits from the calculated tax. In this case, a $2,000 tax credit is applied, further reducing the tax liability. The final tax owed would be the calculated tax minus the $2,000 tax credit.