Mr. and Mrs. Steel, who file a joint return, have $513,200 taxable income in 2020. Compute their regular tax liability.

Question

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For 2020, the tax brackets for married couples filing jointly are: 10% on income up to $19,750, 12% on income over $19,750 to $80,250, 22% on income over $80,250 to $171,050, 24% on income over $171,050 to $326,600, 32% on income over $326,600 to $414,700, 35% on income over $414,700 to $622,050, and 37% on income over $622,050. The Steels' income of $513,200 falls in the 35% bracket. Calculating the tax for each bracket and summing them gives a total tax liability of $129,210.

Mr and Mrs