Mr and Mrs David File a Joint Tax Return

question 86

Multiple Choice

Mr and Mrs David file a joint tax return. They have $169,300 taxable income in 2018, $120,300 of which is ordinary income and $49,000 of which is taxed at a 15% preferential rate. Compute their tax savings from the preferential rate. 

• A) $7,032
• B) $3,516
• C) $7,350
• D) None of the above.

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Definitions:

Rationalization

A defense mechanism in which controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.

Active Effort

The deliberate and purposeful exertion of energy towards achieving specific goals or tasks.

Repression

A defense mechanism where distressing thoughts, memories, or desires are unconsciously blocked from conscious awareness.

Ego

In psychoanalytic theory, the part of the personality responsible for dealing with reality by mediating between the id, superego, and the external world.