# Essay Chapter 8

15522 Words Dec 18th, 2014 63 Pages
Chapter 8
Individual Income Tax Computation and Tax Credits

SOLUTIONS MANUAL

Discussion Questions

1. [LO 1] What is a tax bracket? What is the relationship between filing status and the width of the tax brackets in the tax rate schedule?
A tax bracket is a range of taxable income that is taxed at a specified tax rate. Because only the income in the particular range is taxed at the specified rate, tax brackets are often referred to as marginal tax brackets or marginal tax rates. The level and width of the brackets depend on the taxpayer’s filing status. The tax rate schedules include seven tax rate brackets. The rates for these brackets are 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. In general, the tax brackets are widest for
A marriage penalty (benefit) occurs when, for a given level of income, a married couple has a greater (lesser) tax liability when they use the married filing jointly tax rate schedule to determine the tax on their joint income than they would have owed (in total) if each spouse would have used the single tax rate schedule to compute the tax on each spouse’s individual income. The marriage penalty applies to couples with two wage earners while a marriage benefit applies to couples with single breadwinners.

4. [LO 1] Once they’ve computed their taxable income, how do taxpayers determine their regular tax liability? What additional steps must taxpayers take to compute their tax liability when they have preferentially taxed income?
Once taxpayers have determined their taxable income, they should split the income into two portions: (1) ordinary income and (2) income taxed at preferential rates (if any), and compute tax on each portion separately.

Taxpayers compute the tax on the ordinary income portion by applying the appropriate tax rate schedule (based on their filing status).

For dividends and capital gains taxed at preferential tax rates, the preferential tax rate is 0 percent, 15 percent, or 20 percent. The preferential tax rate is 0 percent to the extent the income would have been taxed in the 10 percent or 15 percent tax rate bracket if it were ordinary income, 20 percent to the extent the income would have been taxed in the 39.6 percent tax rate

## Related Documents

• ###### Essay Chapter 4 And Chapter 8

After going through all the chapters we have went have been going over in Issues of Unity and Diversity, I could relate to almost all of them but I had to narrow them down. I sat and went back through all of them again and two really stuck out to me, Chapter 4 and Chapter 8. Chapter 4 discusses talks about crime and chapter 6 talks about education. Some people may say that those to have nothing to do with each other but being where I’m from they go hand and hand. The south has a bad stereotype for…

Words: 1234 - Pages: 5
• ###### Instructional Guide Chapter 8 Essay

the history, current scope, and future prospects of the world’s most important regional economic agreements. • Understand the implications for business that are inherent in regional economic integrations agreements. This chapter discusses regional economic integration, agreements among countries within a geographic region to achieve economic gains from the free flow of trade and investment among themselves. There are five levels of economic integration. In order of increasing…

Words: 6449 - Pages: 26
• ###### Chapter 8: Memory Management Essay

previous chapter, we discussed deadlocks, resource allocation graphs, and strategies for handling deadlocks. Deadlock is a situation where some processes wait for each other's actions indefinitely, which happens in process synchronization. Operating systems use resource allocation policies to prevent and avoid deadlocks. In this chapter, we’ll discuss the various memory management techniques such as main memory, swapping, memory allocation, paging, and segmentation. (1)Objectives In this chapter, the…

Words: 1448 - Pages: 6
• ###### Essay Multicultural Psychology Chapters 7 And 8

Multicultural Psychology Chapters 7 & 8 Question Set 3 I am a 44 yr. old European American female who was happened to be raised by equal rights advocates. And although I admit being uninformed about privilege and the realities of racism, I do not feel that Helms’ contact is completely accurate for my 1st stage, or status. When my father says he “doesn’t see color” he means it as he feels it genuinely should be. I grew up knowing that he marched with his black and women friends for equal rights…

Words: 886 - Pages: 4
• ###### Essay Chapter 8 : Personal Evaluation And Supervision

Stojkovic, S., Kalinich, D. & Klofas, J. (2015). Criminal justice organizations: Administration and management (6th ed.) (pp. 219-248). Belmont, CA: Wadsworth. Chapter 8: Personal Evaluation and Supervision The primary objective of criminal justice administrators is to identify the goals of the community and determine the most effective means to obtain these goals (Stojkovic, Kalinich & Klofas, 2015). Therefore, it is important to assess the strategies and methods being implemented within criminal…

Words: 1171 - Pages: 5
• ###### Essay Chapter 8: Workplace Violence Test

Chapter 8-Workplace Violence MULTIPLE CHOICE 1. Why was Grant’s law created? a. to reduce the cost of H&S claims b. to reduce the potential of violence in healthcare c. to reduce the risk of violence for gas station attendants d. to raise awareness of workplace violence ANS: c PTS: 1 REF: p. 196 2. Approximately how many workplace homicides occur in Canada each year? a. 7 b. 14 c. 21 d. 55 ANS: b PTS: 1 REF: p. 196 3. Which of the following statements BEST defines how…

Words: 2197 - Pages: 9
• ###### Chapter 8 Microbial Genetics Essay

Microbiology: An Introduction, 11e (Tortora/Case) Chapter 8 Microbial Genetics 8.1 Multiple Choice Questions 1) A gene is best defined as A) a segment of DNA. B) three nucleotides that code for an amino acid. C) a sequence of nucleotides in DNA that codes for a functional product. D) a sequence of nucleotides in RNA that codes for a functional product. E) a transcribed unit of DNA. Answer: C Skill: Recall 2) Which of the following pairs is mismatched? A) DNA polymerase —…

Words: 2495 - Pages: 10
• ###### Business Strategy Chapter 8 Essay

Chapter 8 Business Strategy ( 2nd half continued) EVALUATING MARKET FOCUS AS A WAY TO COMPETITIVE ADVANTAGE Market focus * This is a generic strategy that applices a differentiation strategy approach, or a low cost strategy approach, or a combination- and does so solely in narrow ( or focused) market niche rather than trying to do so across the broader market. The narrow focus may ne geographically defined or defined by product type features, or target customer type, or some comboination of…

Words: 1875 - Pages: 8
• ###### Essay on Analysis of Chapters 8 and 9 in Paradise of the Blind

Paradise of the Blind – Chapters 8 and 9 Write an analysis of how Chapters 8 and 9 explore the connection between culture, food and community The interdependent connection between culture, food and community is pivotal in the demonstration of the importance Vietnamese tradition in Paradise of the Blind. Chapters eight and nine focus on the importance of culture through family particularly evident in the way food acts as an expression of this culture. Food is also used to establish a sense of community…

Words: 799 - Pages: 4
• ###### Essay Spatial Perspectives : Making Sense Of Space And Chapter 8

In this week’s reading we read Chapter 6 titled Spatial Perspectives: Making Sense of Space and Chapter 8 titled Social Psychology: The Urban Experience. Inside both chapters, author John Macionis and Vincent Parrillo make an incredible showing of how environment effects the people and urban. Additionally they give a smart and understanding thought of urban geography and space. Spatial Perspective is the title of chaoter 7. Individuals established urban areas at specific topographical locales where…

Words: 853 - Pages: 4