Mr. and Mrs. Daniels, ages 45, and 42, had the following income items in 2015: $$\begin{array} { l l }
\text { Salaries and wages } & \$ 122,500 \
\text { Interest incorne } & 6,300 \
\text { Dividends eligible for } 15 \% \text { rate } & 4,000 \
\text { Capital gain eligible for } 15 \% / 4 a t e & 1,900
\end{array}$$ Mr. and Mrs. Daniels have no dependents and claim the standard deduction. Compute their income tax liability on a joint return.

Question

Mr. and Mrs. Daniels, ages 45, and 42, had the following income items in 2015: $$\begin{array} { l l } 
\text { Salaries and wages } & \$ 122,500 \
\text { Interest incorne } & 6,300 \
\text { Dividends eligible for } 15 \% \text { rate } & 4,000 \
\text { Capital gain eligible for } 15 \% / 4 a t e & 1,900
\end{array}$$ Mr. and Mrs. Daniels have no dependents and claim the standard deduction. Compute their income tax liability on a joint return.

Quizplus · Accepted Answer

The total income is $134,700. After the standard deduction for 2015 ($12,600) and personal exemptions ($8,000), the taxable income is $114,100. The tax on ordinary income is calculated using the tax brackets, and the qualified dividends and capital gains are taxed at 15%. The total tax liability is approximately $19,453.

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