# Leonardo who is married but files separately earns

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Chapter 4 / Exercise 10
Income Tax Fundamentals 2019
Whittenburg/Gill
Expert Verified
Leonardo, who is married but files separately, earns \$80,000 of taxable income. He also has \$15,000 in city of Tulsa bonds. His wife, Theresa, earns \$50,000 of taxable income.
75. If Leonardo earned an additional \$30,000 of taxable income this year, what would be the marginal tax rate (rounded) on the extra income for year 2012?
76. If Leonardo instead had \$30,000 of additional tax deductions for year 2012, his marginal tax rate (rounded) on the deductions would be:
77. If Leonardo and his wife file married filing jointly in 2012, what would be their average tax rate (rounded)?
78. What is Leonardo and Theresa's effective tax rate for year 2012 (rounded)? A. 15.00% B. 19.67% C. 21.62% D. 28.00% E. None of these
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Chapter 4 / Exercise 10
Income Tax Fundamentals 2019
Whittenburg/Gill
Expert Verified
79. How much money would Leonardo and Theresa save if they filed jointly instead of separately for year 2012? If Susie earns \$750,000 in taxable income, how much tax will she pay as a single taxpayer for year 2012? 80. If Susie earns \$750,000 in taxable income and files as head of household for year 2012, what is Susie's average tax rate (rounded)? B. 31.90% C. 33.00% D. 35.00% E. None of these Eliminating the current system of withholding income taxes directly from employee paychecks would: A. Violate the convenience criterion of federal taxation B. Increase the rate of compliance C. Make collection of federal income taxes easier D. All of the above 81. Curtis invests \$250,000 in a city of Athens bond that pays 7% interest. Alternatively, Curtis could have invested the \$250,000 in a bond recently issued by Initech, Inc. that pays 9% interest with similar risk as the city of Athens bond. Assume that Curtis's marginal tax rate is 28%. 83. What is Curtis's after-tax rate of return on the city of Athens bond? How much implicit tax would Curtis pay on the city of Athens bond? A. \$17,500 B. \$1,400 C. \$1,300 D. \$5,000 E. None of these If Curtis invested in the Initech, Inc. bonds, what would be his after-tax rate of return from this investment? 84.
86. How much explicit tax would Curtis incur on interest earned on the Initech, Inc bond? A. \$16,200 B. \$6,300 C. \$4,900 D. \$12,600 E. None of these
Jackson has the choice to invest in city of Mitchell bonds or Sundial, Inc. corporate bonds that pay 10% interest. Jackson is a single taxpayer who earns \$50,000 annually. Assume that the city of Mitchell bonds and the Sundial, Inc. bonds have similar risk. 87. What interest rate would the city of Mitchell have to pay in order to make Jackson indifferent between investing in the city of Mitchell and the Sundial, Inc. bonds for year 2012?