Question

What is the taxable income liability?

Jeremy earned $101,900 in salary and $7,900 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 $31,700 in itemized deductions, (Use the tax rate schedules.) Problem 4-28 Part-b b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $13,050. What is Jeremy's tax refund or tax due including the tax on the capital gain? Answer is not complete Description Amount (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) eized deductions (6) Greater of standard deduction or itemized deductions (7) Taxable income (8) Income tax liability (9) Child tax credit (10) Tax withholding S 122,850 S 122,850 18,000 31,700 31,700 $ 91,150 S 16,731 2,000 11,200

Answer 1

Income tax liability

From taxable income of $91150, $13050 is a long term capital gain, which taxed at rate of 15%.

Therefore, income tax rate for household will be applied on $78100 (91150-13050).

In this way, total tax liability = 5944+((22%*(78100-51800))+(13050*15%) = 13687.50 =$13688

Therefore,

Income tax liability

$13,688

if it allowed till two decimal places, it will be $13687.50 (kindly take note of it). If you have any doubt, please feel free to share in comment box.