Leonardo, who is married but files separately, earns $70,500 of taxable income. He also has $19,400 in city of Tulsa bonds. His wife, Theresa, earns $54,400 of taxable income. If Leonardo and his wife are married filing jointly in 2020, what is Leonardo and Theresa's effective tax rate for 2020? (Use tax rate schedule.)(Round your final answer to two decimal places.)
A)12.00 percent
B)14.92 percent
C)19.52 percent
D)22.00 percent
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

To calculate the effective tax rate, first, we need to combine Leonardo and Theresa's taxable incomes, which gives us $70,500 + $54,400 = $124,900. The interest from the city of Tulsa bonds is tax-exempt, so it doesn't add to their taxable income. Next, we would use the 2020 tax rate schedule for a married couple filing jointly to calculate their total tax liability. However, without the specific tax brackets and rates provided in the question, we cannot accurately calculate the tax liability and thus the effective tax rate. Therefore, without the ability to perform the exact calculation, none of the provided choices can be confirmed as correct.

Leonardo, Who Is Married but Files Separately, Earns $70,500 of Taxable