green_june
New member
- Joined
- Jul 8, 2017
- Messages
- 2
so this might be a little long.....to compute tax for married couples filing jointly in 2012 the following tax bracket is used:
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).
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 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 |
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???