Question

If Your Taxable Income Is Up to $9,525 $9,525 - $38,700 $38,700 - $82,500 $82,500 - $157,500 $157,500 - $200,000 $200,000 - $500,000 Over $500,000 Single Individuals You Pay This Plus This Percentage Amount on the on the Excess over the Base of the Bracket Base (Marginal Rate) $0 10.0% 952.50 12.0 4,453.50 22.0 14,089.50 24.0 32,089.50 32.0 45,689.50 35.0 150,689.50 37.0 Average Tax Rate at Top of Bracket 10.0% 11.5 17.1 20.4 22.8 30.1 37.0 Standard deduction for individual: $12,000 If Your Taxable Income Is Up to $19,050 $19,050 - $77,400 $ 77,400 - $165,000 $165,000 - $315,000 $315,000 - $400,000 $400,000 - $600,000 Over $600,000 $0 Married couples Filing Joint Returns You Pay This Plus This Percentage Amount on the on the Excess over the Base of the Bracket Base (Marginal Rate) 10.0% 1,905.00 12.0 8,907.00 28,179.00 24.0 64,179.00 32.0 91,379.00 35.0 161,379.00 37.0 Average Tax Rate at Top of Bracket 10.0% 11.5 17.1 22.0 20.4 22.8 26.9 37.0 Standard deduction for married couples filing jointly: $24,000 Quantitative Problem: Jenna is a single taxpayer. During 2018, she earned wages of $114,000. She doesn't itemize deductions, so she will take the standard deduction to calculate 2018 taxable income. In addition, during the year she sold common stock that she had owned for five years for a net profit of $7,400. How much does Jenna owe to the IRS for taxes? Do not round intermediate calculations. Round your answer to the nearest cent.

Answer 1

Total income:
Wages	$114,000
Long term gain in Common Stock	$7,400
Total	$121,400
Less: Standard deduction of Individual	$12,000
Total Taxable income	$109,400
Taxes payable:
Under the slab: (82500 - 157500) for Single Individuals
Tax owe to IRS = 14089.50 + (109400 - 82500) * 24% =
14089.50 + 6456 = 20545.50 OR 20546