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???