Question

Mary Jarvis is a single individual who is working on filing her tax return for the previous year. She has assembled the following relevant information: • She received $139,000 in salary • She received $15,000 of dividend income. • She received $5,500 of interest income on Home Depot bonds. . She received $22,000 from the sale of Disney stock that was purchased 2 years prior to the sale at a cost of $5,200. • She received $12,000 from the sale of Google stock that was purchased 6 months prior to the sale at a cost of $7,000. • Mary receives one exemption (54,000), and she has allowable itemized deductions of $7.500. These amounts will be deducted from her gross income to determine her taxable income Assume that her tax rates are based on Table 3.5. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below Open spreadsheet a. What is Mary's federal tax liability? Round your answer to the nearest cent. Do not round intermediate calculations. b. What is her marginal tax rate? Round your answer to 1 decimal place. c. What is her average tax rate? Round your answer to 2 decimal places,

Answer 1

Hey,

I have solved this question by Calculating total Gross and Net Income of Mary. Income of Mary Taxed as per given Slab and on the basis of base of the Bracket, Tax amount is Calculated. Further, Marginal Rate and Average Rate percentage is calculated by using Base of the Bracket row.  

I case of any doubt feel free to ask.

Thank You
Answer Ans Comprufation of Gross a Net Income of Many Taunts Gross & Net Income Amount (4) 0 salary Income 139,000 & Dividend Income 15,000 ③ Interest Income from Home Depot Bonds 5,500 4 Galu on sale of Disney Stock Sale Value - Purchase Value) 16,800 / $ 22,000 - $5,200) 6 am on sale of Google Stock 5,000 ($ 12,000 - $ 7000) 6 Exempted Income . Gross Income 181,300 Less:- Deduction 7,500 - Net Income Tanable T 173,800 (9) Net Income of Mary's = $ 173,800 Tan Llability on the basts $18,481.25 of Tan Braket ($90,750 - $ 189,750) So, Pau Liability (Round 7) = $ 18,401 /

(6) Pate Marginal Tax Rate of Mary Net Income = $173,800 Tan Bracket - $ 90,750 - $ 189,750 So, Mauginal Tau Rate = 28.0% (c) Average Tau Rate of Many - Net Income = $1,73,800 Tan Bracker = $90,750 - $189,750 So, Average Tau Rate = 24,30 % CS Scanned with CamScanner