Kim and Kanye have been dating for years and are now thinking about getting married. As a financially sophisticated couple, they want to think through the tax implications of their potential union.

a. Suppose Kim and Kanye both earn $70,000 (so their combined income is $140,000). Using the tax bracket information in Table 1.2, calculate the combined tax bill that they would pay if they remain single, and compare that to the taxes they would pay if they were married and filed a joint return.

b. Now suppose that Kim and Kanye both earn $100,000 (so their combined income is $200,000). Calculate the combined tax bill that they would pay if they remain single, and compare that to the taxes that they would pay if they were married and filed a joint return.

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TABLE 1.2 FEDERAL INCOME TAX RATES AND BRACKETS FOR INDIVIDUAL AND JOINT RETURNS (DUE BY APRIL 15, 2015) Taxable Income Tax Rates 10.0% 15.0% 25.0% 28.0% 33.0% 35.0% 39.6% Individual Returns $0 to $9,075 $9,076 to $36,900 $36,901 to $89,350 $89,351 to $186,350 $186,351 to $405,100 $405,101 to $406,750 Over $406,750 Joint Returns $0 to $18,150 $18,151 to $73,800 $73,801 to $148,850 $148,851 to $226,850 $226,851 to $405,100 $405,101 to $457600 Over $457,600