Use the marginal tax rates in the table below to compute the tax owed in the following situation.
Winona and Jim are married filing​ jointly, with a taxable income of ​$398 comma 000. They are entitled to a ​$7500 tax credit.
Tax Rate
Married Filing Jointly
​10%
up to​ $18,650
​15%
up to​ $75,900
​25%
up to​ $153,100
​28%
up to​ $233,350
​33%
up to​ $416,700
​35%
up to​ $470,700
​39.6%
above​ $470,700
Standard deduction
​$12,700
Exemption 
​(per person)
​$4050
.
.
.
Question content area right
Part 1
The tax owed is ​$
  
enter your response here.
​(Type an integer or a​ decimal.)

To compute the tax owed, we'll use the marginal tax rates and apply them to the different income brackets. Winona and Jim are married and filing jointly, with a taxable income of $398,000. 

We also need to factor in their standard deduction and personal exemptions before calculating the tax. Here are the steps:

### Step 1: Subtract deductions and exemptions from income
- Standard deduction: $12,700
- Personal exemptions: $4,050 per person, so for two people: $4,050 × 2 = $8,100
- Total deductions and exemptions: $12,700 + $8,100 = $20,800

Their taxable income after deductions and exemptions:
\[
398,000 - 20,800 = 377,200
\]
This is their final taxable income for calculating the tax.

### Step 2: Apply marginal tax rates
We calculate the tax by applying the marginal tax rates to each portion of their income:

1. **10%** on income up to $18,650:
   \[
   0.10 \times 18,650 = 1,865
   \]
   
2. **15%** on income between $18,650 and $75,900:
   \[
   0.15 \times (75,900 - 18,650) = 0.15 \times 57,250 = 8,587.5
   \]
   
3. **25%** on income between $75,900 and $153,100:
   \[
   0.25 \times (153,100 - 75,900) = 0.25 \times 77,200 = 19,300
   \]
   
4. **28%** on income between $153,100 and $233,350:
   \[
   0.28 \times (233,350 - 153,100) = 0.28 \times 80,250 = 22,470
   \]
   
5. **33%** on income between $233,350 and $377,200:
   \[
   0.33 \times (377,200 - 233,350) = 0.33 \times 143,850 = 47,470.5
   \]

### Step 3: Total tax before credits
Summing up the tax amounts from each bracket:
\[
1,865 + 8,587.5 + 19,300 + 22,470 + 47,470.5 = 99,693
\]

### Step 4: Apply tax credit
Winona and Jim have a $7,500 tax credit, which directly reduces their total tax owed:
\[
99,693 - 7,500 = 92,193
\]

Thus, the tax owed is **$92,193**.

Would you like to see more details or have any questions?

Here are some follow-up questions to expand your understanding:

1. What happens to the tax credit if their income changes?
2. How do deductions and exemptions affect taxable income?
3. What would their tax be if they were filing separately?
4. How do marginal tax rates compare to flat tax systems?
5. What are the differences between tax deductions and tax credits?

**Tip:** Remember, tax credits reduce the actual tax liability, while deductions reduce taxable income.

Use the marginal tax rates in the table below to compute the tax owed in the following situation.
Winona and Jim are married filing jointly, with a taxable income of $398,000. They are entitled to a $7,500 tax credit.

Learn how to calculate the tax owed for a married couple filing jointly with $398,000 in taxable income, using marginal tax rates and applying deductions, exemptions, and tax credits. This problem covers concepts in taxation and personal finance, suitable for advanced math or finance students.

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