The easiest way to do this is to work from the $68,000 income one step at a time.
For married filing jointly in 2014, the standard deduction was $12,400.
There are 4 people in the family. The exemption was $3,950 per person:
4 × $3,950 = $15,800
Now subtract both from their income:
$68,000 - $12,400 - $15,800 = $39,800 taxable income
For 2014, the first $18,150 is taxed at 10%:
$18,150 × .10 = $1,815
The remaining $21,650 is taxed at 15%:
$21,650 × .15 = $3,247.50
Total tax before credits:
$1,815 + $3,247.50 = $5,062.50
They have two qualifying children, giving them a $2,000 child tax credit ($1,000 each).
$5,062.50 - $2,000 = $3,062.50
Their marginal tax rate is 15% because that is the tax bracket their last dollar of taxable income falls into.
Using gross income, their average tax rate is:
$3,062.50 / $68,000 = 4.50%
So the main answers are:
Standard deduction: $12,400
Exemptions: $15,800
Child tax credit: $2,000
Marginal tax rate: 15%
Average tax rate: about 4.5%
