Question

Using the tax form from 2016, instructions and info attached, answer the following questions. Assume you are a single person with no dependents who made $39,000.00 from your primary job and an additional $7,500.00 from a part time position. You had a total of $7,900 dollars withheld in taxes (from both jobs combined) and will take the standard deduction. Will you get a refund or will you have to pay more tax? (5 pts.) What is the amount of the refund/payment? (5 pts.) Using the tax tables on page 90 of the instructions, assume a single person has a taxable income of $87,000.00. What will the single person's total tax be? (5 pts.) What is the single person's effective tax rate? (5 pts.)

Answer 1

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Answers are highlighted in yellow: As per Tax rule - 2016: Solution: Salary full time Salary part time Gross income Standard deduction & personal exemption (6300+4050) Taxable income Gross Tax liability (927.50)+(36150-9275)*15% Tax withheld Refund Amount: (7900-3922) $ 39,000 $ 7,500 $ 46,500 $ 10,350 $ 36,150 $ 4,958.75 $ 7,900 $ 2,941.25 a) & b) 2) Total tax_(5183.75)+(87000-37650)*25% $ 17,521.25 Effective tax rate (17521.25)/87000 20.1%

Answers are highlighted in yellow: As per Tax rule - 2019: Solution: $ $ Salary full time Salary part time Gross income Standard deduction Taxable income Gross Tax liability Tax withheld Refund 39,000 7,500 46,500 12,200 34,300 3,922 7,900 3,978 $ $ $ $ $ (970)+(34300-9700)*12% a) & b) Amount: (7900-3922) 2) Total tax (14382.50)+(87000-84200)*24% $ 15,054.50 Effective tax rate (15054.50)/87000 17.3%

Answers are highlighted in yellow: As per Tax rule - 2019: Solution: $ $ Salary full time Salary part time Gross income Standard deduction Taxable income Gross Tax liability Tax withheld Refund 39,000 7,500 46,500 12,200 34,300 3,922 7,900 3,978 $ $ $ $ $ (970)+(34300-9700)*12% a) & b) Amount: (7900-3922) 2) Total tax (14382.50)+(87000-84200)*24% $ 15,054.50 Effective tax rate (15054.50)/87000 17.3%