Questions: Use the 2021 marginal tax rates to compute the tax owed by the person with the given filing status, taxable income, and tax credit. Head of household with a taxable income of 56,000 and a 5000 tax credit i. Click the icon to view the 2021 marginal tax rates.

Solution Steps

To compute the tax owed, we need to follow these steps:

1. Determine the applicable tax brackets for the "Head of Household" filing status using the 2021 marginal tax rates.
2. Calculate the tax owed by applying the marginal tax rates to the taxable income of $56,000.
3. Subtract the tax credit of $5,000 from the calculated tax to find the final tax owed.

For the Head of Household filing status in 2021, the marginal tax rates are as follows:

• \( 0\% \) on income up to \( \$14,200 \)
• \( 10\% \) on income from \( \$14,201 \) to \( \$54,200 \)
• \( 12\% \) on income from \( \$54,201 \) to \( \$86,350 \)

Given a taxable income of \( \$56,000 \), we calculate the tax owed as follows:

1. For the first \( \$14,200 \): \[ \text{Tax} = 0.10 \times 14200 = 1420 \]

2. For the income between \( \$14,201 \) and \( \$54,200 \) (which is \( 54000 - 14200 = 40000 \)): \[ \text{Tax} = 0.12 \times (54200 - 14200) = 0.12 \times 40000 = 4800 \]

3. For the income between \( \$54,201 \) and \( \$56,000 \) (which is \( 56000 - 54200 = 1800 \)): \[ \text{Tax} = 0.22 \times (56000 - 54200) = 0.22 \times 1800 = 396 \]

Adding these amounts together gives: \[ \text{Total Tax} = 1420 + 4800 + 396 = 6616 \]

Now, we subtract the tax credit of \( \$5,000 \): \[ \text{Final Tax Owed} = 6616 - 5000 = 1616 \]

Final Answer