Question

Hongtao is single and has a gross income of $87,200. His allowable deductions for adjusted gross income are $4,300, and his itemized deductions are $18,550. The standard deduction for 2019 is $12,200.

Round all amounts to the nearest dollar. Refer to the Tax Rate Schedules to answer the following questions.

a. Hangtao's taxable income is $________and his tax liability is $_______for 2019.

b. If Hongtao has $10,700 withheld from his salary during 2019 then Hongtao has a refund of $________

c.Assume the same facts as in part a and part b, except that Hongtao is married. His wife's salary is $25,300, and she has $100 withheld from her paycheck. They file jointly. The standard deduction for 2019 is $24,400.
Their taxable income is $_______ and their tax liability is $_______for 2019. They will receive a refund of $_______

2019 Tax Rates Single Taxable Income $0 - $9,700 $9,701 - $39,475 $39,476 - $84,200 $84,201 - $160,725 $160,726 - $204,100 $204,101 - $510,300 $510,301 or more Tax Rate 10% of taxable income $970.00 plus 12% of the amount over $9,700 $4,543.00 plus 22% of the amount over $39,475 $14,382.00 plus 24% of the amount over $84,200 $32,748.00 plus 32% of the amount over $160,725 $46,628.50 plus 35% of the amount over $204,100 $153,798.50 plus 37% of the amount over $510,300 Married Filing Jointly or Qualifying Widow(er) Taxable Income Tax Rate $0 - $19,400 10% of taxable income $19,401 - $78,950 $1,940.00 plus 12% of the amount over $19,400 $78,951 - $168,400 $9,086.00 plus 22% of the amount over $78,950 $168.401 - $321,450 $28,765.00 plus 24% of the amount over $168,400 $321,451 - $408,200 $65,497.00 plus 32% of the amount over $321,450 $408,201 - $612,350 $93,257.00 plus 35% of the amount over $408,200 $612,351 or more $164,709.50 plus 37% of the amount over $612,350 Head of Household Taxable Income Tax Rate $0 - $13,850 10% of taxable income $13,851 - $52,850 $1,385.00 plus 12% of the amount over $13,850 $52,851 - $84,200 $6,065.00 plus 22% of the amount over $52,850 $84,201 - $160,700 $12,962.00 plus 24% of the amount over $84,200 $160,701 - $204,100 $31,322.00 plus 32% of the amount over $160,700 $204,101 - $510,300 $45,210.00 plus 35% of the amount over $204,100 $510,301 or more $152,380.00 plus 37% of the amount over $510,300

Answer 1

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Answers are highlighted in yellow: Solution: Gross income Less: Deduction for AGI AGI Less: Greater of itemized or standard deduction Hongtao's taxable income is Tax liability (4543)+(64350-39475)*22% 87200 4300 82900 18550 64350 10,016 for 2019 a) $ b) Refund (10700-10016) = $ 684 Gross income (87200+25300) Less: Deduction for AGI AGI Less: Greater of itemized or standard deduction There taxable income is Tax liability (9086)+(83800-78950)*22% 112500 4300 108200 24400 83800 10,153 for 2019 $ Refund (10700+100)-(10153) $ 647