Marcia and Tim, a Married Couple, File a Joint Return

question 67

Multiple Choice

Marcia and Tim, a married couple, file a joint return in 2019.Marcia went back to college this year as a full-time graduate student.What is the maximum reduction they can achieve in their taxes for the $6,800 in tuition that Marcia pays if their AGI is $118,000 and the LLC phaseout range is $116,000-$136,000?

• A)$2,000
• B)$1,360
• C)$1,224
• D)$1,000

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Definitions:

Proportional Tax

A tax system where the tax rate is fixed and applied uniformly to all taxpayers, regardless of their income level.

Marginal Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, essentially the rate on the last dollar of income earned.

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), expressed as a percentage.

Total Taxes

The comprehensive amount of taxes paid by an individual or entity, encompassing federal, state, and local taxes.