1. 1a. Tax on Income Wages and Salaries$ 42,381 Interest and Dividend Income $ 1,215 Capital Gains$ 3,092 Net Business Income$ 7,824 Adjusted Gross Income : $ 42,381 $ 1,215 $ 3,092 $ 7,824 $54,512

2. 1b. Tax on Income Wages and Salaries$ 42,381 Interest and Dividend Income $ 1,215 Capital Gains$ 3,092 Net Business Income$ 7,824 Taxable Income : Adjusted Gross Income: $ 54,512 - Personal Exemptions $ 14,600 - Standard Deduction $ 11,400 $28,512

3. 1c. Tax on Income Wages and Salaries$ 42,381 Interest and Dividend Income $ 1,215 Capital Gains$ 3,092 Net Business Income$ 7,824 Tax Liability : $16,750 * (10%) + ($28,512 - $16,750) * (15%) $1,675 + $1,764 = $3,439

4. 2a. Liability and Average Tax Rate Miriam Single Taxable Income$40,000 Tax Liability : $8,375 * (10%) + ($34,000 - $8,375) * (15%) + ($40,000 - $34,000) * (25%) $837 + $3,844 + $1,500 = $6,181 Average Tax Rate : $6,181/$40,000 = 15.5%

5. 2b. Liability and Average Tax Rate Robin Single Taxable Income$173,000 Tax Liability : $8,375 * (10%) + ($34,000 - $8,375) * (15%) + ($82,400 - $34,000) * (25%) + ($171,850 - $82,400) * (28%) + ($173,000 – $171,850) * (33%) $837 + $3,844 + $12,100 + $25,046 + $379 = $42,206 Average Tax Rate : $42,216/$173,000 = 24.4%

6. 2c. Liability and Average Tax Rate Fred & WilmaFile Jointly Taxable Income$123,000 Tax Liability : $16,750 * (10%) + ($68,000 - $16,750) * (15%) + ($123,000 - $68,000) * (25%) $1,675 + $7,687 + $13,750 = $23,112 Average Tax Rate : $23,112/$123,000 = 18.8%

7. 2d. Liability and Average Tax Rate Boris & NatashaFile Jointly Taxable Income$451,000 Tax Liability : $16,750 * (10%) + ($68,000 - $16,750) * (15%) + ($137,300 - $68,000) * (25%) + ($209,250 – $137,300) * (28%) + ($373,650 – $209,250) * (33%) + ($451,000 – $373,650) * (35%) $1,675 + $7,687 + $17,325 + $20,146 + $54,252 + $27,072 = $128,157 Average Tax Rate : $128,157/$451,000 = 28.4%