Alan and Sara Winthrop are a married couple who file a joint income tax return.They have two children,so they claim a total of 4 exemptions.In addition,they have legitimate itemized deductions totaling $25,750.Their total income from wages is $237,500.Assume the following tax table is applicable:
What is their marginal tax rate?

Question

​Alan and Sara Winthrop are a married couple who file a joint income tax return.They have two children,so they claim a total of 4 exemptions.In addition,they have legitimate itemized deductions totaling $25,750.Their total income from wages is $237,500.Assume the following tax table is applicable: ​​  ​
What is their marginal tax rate?

Quizplus · Accepted Answer

To find the marginal tax rate, we need to look at the tax rates based on the taxable income range that the Winthrops' income falls in. Their taxable income would be calculated as follows:

Total income: $237,500 
Minus exemptions (4 x $4,050): $16,200 
Minus itemized deductions: $25,750 
Taxable income: $195,550

Their taxable income falls in the range of $186,476 to $405,100, which has a tax rate of 28%. Therefore, the Winthrops' marginal tax rate is 28%.

As for the best choice, it is not entirely clear what is being asked. If it is asking for the best strategy to minimize their taxes, without further information, it is difficult to determine. However, based on the given information, it appears that they have already claimed all the exemptions and deductions that they are eligible for. If they have additional expenses that could be claimed as deductions or if they have investment opportunities that could produce tax-favored income, those could be considered as potential strategies to minimize their taxes.

​Alan and Sara Winthrop Are a Married Couple Who File

Alan and Sara Winthrop Are a Married Couple Who File