The Johnsons are buying a home that has monthly mortgage payments of $3,000, or $36,000 a year. Of this amount, $32,800 goes for interest and real estate property taxes. The couple has an additional $14,000 in itemized deductions. Using these numbers and Table 4-3, calculate their taxable income and tax liability.
Assuming they had a combined $18,000 in federal income taxes withheld, how much of a refund will the Johnsons receive?
What is their marginal tax rate?
Based on gross income, what is their average tax rate?