computing tax for married couples filing jointly in 2012

green_june

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Jul 8, 2017
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so this might be a little long.....to compute tax for married couples filing jointly in 2012 the following tax bracket is used:
If the AGI is over-
But not over-
The tax is:
Of the amount over-
$0
$17,000
10%
$0

$17,000
$69,000
$1,700 + 15%
$17,000
$69,000
$139,350
$9,500 + 25%
$69,000
$139,350
$212,300
$27,087.50 + 28%
$139,350
$212,300
$379,150
$47,513.50 + 33%
$212,300
$379,150
--
$102,574.00 + 35%
$379,150

in addition, the total tax is reduced by $1000 for each child that a couple has. this next table is the total tax for certain amounts of AGI (adjusted gross income).

AGI
Number of Kids
Total Tax
$4,000
1
$0
$20,000
0
$2,150
$120,000
3
$19,250
$150,000
4
$26,069.50
$250,000
0
$59954.50
$500,000
5
$139,871.50
what i have to do is explain how the total tax was found for each AGI in the second chart. this is what i did to try to find an answer:
if a couple has 5 children:
child credit = 1000 * 5 = 5000
and the AGI was given:
AGI = 500,000
according to the tax bracket since the couple's AGI is over $379,150 the tax is:
102,574 + 35%(of the amount over 379, 150)
tax = 102, 574 + (500,000 * 0.35) = 277,574
now the total tax should be tax minus child credit:
total tax = 277,574 - 5000 = 272, 574 this is obviously the wrong answer according to the second chart. I think my thought process for this is wrong, or maybe i don't truly understand the problem. I've been trying to figure this out for hours :( and still haven't found what I'm doing wrong.
Can anyone help me with this???
 
if a couple has 5 children:
child credit = 1000 * 5 = 5000
and the AGI was given:
AGI = 500,000
according to the tax bracket since the couple's AGI is over $379,150 the tax is:
102,574 + 35%(of the amount over 379, 150)
tax = 102, 574 + (500,000 * 0.35) = 277,574 IT IS NOT 500K BUT 500K - 379K.
now the total tax should be tax minus child credit:
total tax = 277,574 - 5000 = 272, 574 this is obviously the wrong answer according to the second chart. I think my thought process for this is wrong, or maybe i don't truly understand the problem. I've been trying to figure this out for hours :( and still haven't found what I'm doing wrong.
Can anyone help me with this???
\(\displaystyle 102,574 + (500,000 - 379,150) * 0.35 = 144,871.50\)

\(\displaystyle 144,871.5 - 5000 = 139,871.50.\)
 
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