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Emily Hill is 24 years old and single, lives in an apartment, and has no dependents....

Emily Hill is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $55,000 as a sales assistant for Business Solutions: $3,910 of her wages was withheld for federal income taxes. In addition, she had interest income of $142.

- Estimate her taxable income

- Estimate her tax liability

- Estimate her tax refund or tax owed

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Answer #1

Answer:

Emily Hill is 24 years old and single and has no dependents.

Tax year = Last year = 2018

Standard deduction for single = $12,000

There is no personal exemption amount for 2018.

Taxable Income:

Earnings as sales assistant for Business Solutions = $55,000

Add,  interest income = $142

Gross Income = $55,000 + $142 = $55,142

Less, Standard deduction = $12,000

Taxable Income = 55142 - 12000 = $43,142

Taxable Income = $43,142

Tax Liability:

Single 2018 tax rates and brackets Taxable Income S0 - S9,525 $9,526- $38,700 Tax Rate 10% of taxable income $952.50 plus 12% of the amount over $9,525 $4.453.50 plus 22% of the amount over $38.700 $14,089.50 plus 24% of the amount over $82,500 $32,089.50 plus 32% of the amount over $157,500 $45,689.50 plus 35% of the amount over $200,000 $150,689.50 plus 37% of the amount over $500,000 $82,501- $157,500 $157,501- $200,000 $200,001 $500,000 $500,001 or more

Taxable Income = $43,142

Tax liability = $4453.50 + (43142 -38700) * 22% = $5431

Tax liability = $5,431

Tax owed

Tax owed = Tax liability - withholding = 5431 - 3910 = $1,521

Tax owed = $1,521

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