Question

Lacy is a single taxpayer. In 2018, her taxable income is $44,400. What is her tax liability in each of the following alternative situations? Use Tax Rate Schedule, Dividends and Capital Gains Tax Rates, Estates and Trusts for reference. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

rev: 10_19_2018_QC_CS-143681

a. All of her income is salary from her employer.

Tax liability _________

b. Her $44,400 of taxable income includes $3,000 of qualified dividends.

Tax liability _________

c. Her $44,400 of taxable income includes $19,000 of qualified dividends.

Tax liability _________

    

Answer 1

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Solution: Answers are highlighted in Yellow: As per Tax year 2018, Answer will be different for different tax year: Particulars Amount Explanation 1) Taxable income 44400 2) Preferentially taxed income 3) Income taxed at ordinary rates 44400 4) Tax on income taxed at ordinary rates 5707.50(4453.50)+(44400-38700) * 22% 5) Tax on preferentially taxed income 6) Tax Liability 5707.50 (4+5) 7) Net Investment income tax 0.00 Not Applicable 8) Total Income & Net Investment tax 5707.50 (6+7) b) Particulars 1) Taxable income 2) Preferentially taxed income 3) Income taxed at ordinary rates 4) Tax on income taxed at ordinary rates 5) Tax on preferentially taxed income 6) Tax Liability 7) Net Investment income tax 8) Total Income & Net Investment tax Amount Explanation 44400 3000 41400 5 047.50(4453.50)+(41400-38700)*22% 450 (3000*15%) 5497.50 (4+5) 0.00 Not Applicable 5497.50 (6+7) Particulars 1) Taxable income 2) Preferentially taxed income 3) Income taxed at ordinary rates 4) Tax on income taxed at ordinary rates 5) Tax on preferentially taxed income 6) Tax Liability 7) Net Investment income tax 8) Total Income & Net Investment tax Amount Explanation 44400 19000 25400 2857.50 (952.50)+(25400-9525)*12% 870 (38600-25400)*0%+ [(19000)-(38600-25400)]*15% 3727.50 (4+5) 0.00 Not Applicable 3727.50 (6+7)