Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductions, and Exemptlons**
$Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductions, and Exemptlons** - Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the 15 \% marginal rate affects income starting at \$ 8925 , which is where the 10 \% rate leaves off, and continuing up to \$ 36,250 . This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers. -Abbey earned $70,218 in wages. Kathryn earned $70,218, all in dividends and long-term capital gains. Calculate the total tax owed by each, including both FICA and income taxes. Assume they Are both single and take the standard deduction. Note that long-term capital gains and dividends Are taxed at 0% for income in the 10% and 15% tax brackets and at 15% for income in all higher tax Brackets. A) Abbey: \$ 16,355 Kathryn: \$ 3595 B) Abbey: \$10,983 Kathryn: \$ 3595 C) Abbey: \$ 16,864 Kathryn: \$ 5992 D) Abbey: \$ 15,590 Kathryn: \$ 8586$

- Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the

15 \%

marginal rate affects income starting at

\$ 8925

, which is where the

10 \%

rate leaves off, and continuing up to

\$ 36,250

.
" This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers.
-Abbey earned $70,218 in wages. Kathryn earned $70,218, all in dividends and long-term capital gains. Calculate the total tax owed by each, including both FICA and income taxes. Assume they
Are both single and take the standard deduction. Note that long-term capital gains and dividends
Are taxed at 0% for income in the 10% and 15% tax brackets and at 15% for income in all higher tax
Brackets.
A) Abbey:

\$ 16,355

Kathryn:

\$ 3595

B) Abbey: \$10,983
Kathryn:

\$ 3595

C) Abbey:

\$ 16,864

Kathryn:

\$ 5992

D) Abbey:

\$ 15,590

Kathryn:

\$ 8586

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