Answer:
a. $8,361
b. $1,2610
c. 26,564
d. 5,427
e. 59,883
Explanation:
a.
Taxable Income = $62,449 - $560
= $61,889
Finding the tax liability in tables:
Tax on 61,889
= [1,845 +(61,889 - 18,450) × 15%]
= 1,845 + 6,516
= 8,361
Subtracting or Deducting the tax on the dividend income
= $560 × 0%
= 0
Therefore, the tax liability is $8,361
b.
Taxable Income = $12,932 - $322
= $12,610
Tax liability is $1,2610
c.
Taxable income = $144,290 - $4,384
= $139,906
Tax will be:
= 1,845 (74,900 - 18,450) × 15% + (139,906 - 74,900) × 25%
= 1,845 + 8,467.5 + 16,251.5
= $26,564
d.
Taxable income = $43,297 - $971
= $42,326
Tax liability will be:
= [1,845 + (42,326 - 18,450) × 15%
= 1,845 + 3,581.4
= 5,427
e.
Taxable income = $262,403 - $12,396
= $250,007
Tax on the qualified income will be:
= $12,396 × 15%
= $1,859.4
Tax liability will be:
= 1,845 {74,900 - 18,450) × 15% + (151,200 - 74,900) × 25% + (230,450 - 151,200) × 28% + (250,007 - 230,450) × 33%
= 1,845 + 8,460 + 19,075 + 22,190 + 6,453.81
= $58,024
Total tax liability will be:
= $58,024 + $1,860
= $59,883
Note: The values are taken from the tax liability table.
