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Nick and Jessica Are Married Taxpayers That File Married Filing

question 15

Essay

Nick and Jessica are married taxpayers that file married filing separately. Jessica earns $250,000 of taxable income per year. Nick earns $130,000 of taxable income per year. Using the appropriate U.S. tax rate schedule for year 2014, how much tax does each of them pay? What are their marginal and average tax rates? How much tax would they save, if any, if they filed jointly? (Round the tax rates to 2 decimal places, e.g., .12345 as 12.35%)


Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers.

Tax

An obligatory fiscal contribution or alternative form of taxation placed on individuals by a governing body with the aim of financing government operations and a range of public expenses.

Buyers

Individuals or entities that purchase goods and services.

Government

The organization or system through which a community, state, or nation is ruled, and which sets and enforces laws and policies.

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