Question

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Jeremy earned $100,900 in salary and $6,900 in interest income during the year. Jeremy’s employer withheld $11,200 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of household and has $26,700 in itemized deductions. (Use the tax rate schedules.)

rev: 07_06_2018_QC_CS-130826

b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $8,050. What is Jeremy’s tax refund or tax due including the tax on the capital gain?

2018 Tax Rate Schedules Individuals Schedule X-Single Schedule Z-Head of Household If taxable income But not over: If taxable income is But not over: is over: over 0 $ 9,525 | 10% of taxable income 0 S 13.600 | 10% of taxable income $ 3S,700 | S952.50 plus 12% of $ 51,500 | $1.360 plus 12% of the excess over $9.525 the excess over $ S2.500 | $4,453.50 plus 22% of $ 82.500 $5.944 plus 22% of the excess over S51.800 the excess over S38,700 S 82,500 $157,500 | $14.0S9.50 plus 24% S 82,500 $157.500 | $12.698 plus 24% of the excess over S82,500 of the excess over SS2,500 $157,500 $200.000 | $32.0S9.50 plus 32% $157,500 $200.000 | $30.698 plus 32% of of the excess over the excess over S157,500 $157,500 $200,000 $500.000 | $45.6S9.50 plus 35% $200,000 $500.000 | $44.298 plus 35% of of the excess over the excess over 200,000 $200,000 $500,000 $500,000 $150.689.50 plus 37% of the excess over S500,000 $149.29S plus 37% of the excess over 500,000 Schedule Y-1-Married Filing Jointly or Qualifying Schedule Y-2-Married Filing Separately Wido er If taxable income But not over: The tax is: If taxable income is But not over: is over over 0 $ 19.050 | 10% of taxable income 0 $ 9.525 | 10% of taxable income S 19,050 $ 77.400 | $1,905 plus 12% of $ 3S.700 | $952.50 plus 12% of the excess over S19,050 the excess over $9.525 $165.000 | $8.907 plus 22% of $ 82.500 | $4.453.50 plus 22% of the excess over the excess over $77.400 $165.000 $315.000 | $2S. 179 plus 24% of S 82.,500 $157,500 | $14.0S9.50 plus 24% the excess over of the excess over S165,000 S82,500 $315,000 $400.000 | $64,179 plus 32% of $157,500 $200.000 | $32.0S9.50 plus 32% the excess over of the excess over S315,000 S157,500 $400,000 $600.000 | $91,379 plus 35% of $200,000 $300.000 | $45.6S9.50 plus 35% of the excess over the excess over S400,000 $200,000 $161.379 plus 37% of the excess over 600,000 $600,000 S300,000 $80.6S9.50 plus 37% of the excess over S300,000

Answer 1

b. tax due or refund including capital gain: ( tax rate on capital gain = 15 % )

= taxable income ( as same shown above ) + capital gain

= 81100 + 8050

= $ 89150

tax due = $ 81100 x 22 % + $ 8050 x 15 %

= $ 17842 + $ 1207.5

= $ 19049.5

= $ 19050 ( after round off ) .