# Income tax concepts unit 1 – Essaylink

Using your text, complete the following. In these problems, apply your knowledge of tax rate structures, tax liability, and tax return preparation.

● Problem 37, on page 1-32.

● Problem 41, on page 1-32.

● Problem 43, on page 1-33.

● Problem 45, on page 1-33.

● Problem 50, on page 1-33.

37. Use the   information in Table 1-3. If the federal tax system was   changed to a proportional tax rate structure with a tax rate of 17%,   calculate the amount of tax liability for 2017 for all taxpayers. How does   this amount differ from the actual liability?

ABLE 1-3 Individual Income Tax Returns from 2017, Number of Tax Returns, Taxable Income (in thousands), Total Tax Liability (in thousands), and Average Tax Rate by Ranges of Adjusted Gross Income

Source: IRS Statistics of Income Bulletin, Winter 2019, Table 1.

*The average tax rate is total tax liability divided by taxable income.

41.Cameron is single and has taxable   income of \$88,806. Determine his tax liability using the tax tables and using   the tax rate schedule. Why is there a difference between the two amounts?

43.Determine the tax liability, marginal tax rate, and average tax rate (rounded to two decimal places) in each of the following cases. Use the tax tables to determine tax liability.

a. Single taxpayer, taxable income of \$38,862:
Liability = __________ Marginal = __________ Average = __________

b. Single taxpayer, taxable income of \$89,889:
Liability = __________ Marginal = __________ Average = __________

45. Determine the tax liability, marginal tax rate, and average tax rate (rounded to two decimal places) in each of the following cases. Use the tax tables to determine tax liability.

a. Married taxpayers, taxable income of \$38,862:
Liability = _________ Marginal = _________ Average = _________

b. Single taxpayer, taxable income of \$61,229:
Liability = _________ Marginal = _________ Average = _________

50. Xavier and his wife Maria have total W-2 income of \$93,102. They will file their tax return as married filing jointly. They had a total of \$7,910 withheld from their paychecks for federal income tax. Using the tax tables, determine the amount of refund or additional tax due upon filing their tax return. Indicate whether the amount is a refund or additional tax.

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