Question

Mary Jarvis is a single individual who is working on filing her tax return for the previous year. She has assembled the following relevant information: • She received $102,000 in salary. • She received $17,500 of dividend income. • She received $7,400 of interest income on Home Depot bonds. • She received $24,500 from the sale of Disney stock that was purchased 2 years prior to the sale at a cost of $6,700. • She received $13,500 from the sale of Google stock that was purchased 6 months prior to the sale at a cost of $4,400. • Mary receives one exemption ($4,000), and she has allowable itemized deductions of $7,500. These amounts will be deducted from her gross income to determine her taxable income. Assume that her tax rates are based on Table 3.5. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. What is Mary's federal tax liability? Round your answer to the nearest cent. Do not round intermediate calculations. $ b. What is her marginal tax rate? Round your answer to 1 decimal place. % c. What is her average tax rate? Round your answer to 2 decimal places. %

Need this ASAP Please!

Answer 1

Amounts are in $

1. Total Federal tax liability = $28,326.25

2. Marginal tax rate = 28%

3. Average tax rate = Total tax/Total Income

= 28,326.25/(107,000+35,300)

= 19.91%

Calculation of Toxable income Salary Interest Income Se To Capital gains (13,5oork, hoo) Income before exemp Erded temaah deduction Taxable income before Div. &lfacin Ant 102,000 tengono 7400 9, loo 118,soo (4000) (7500 107.000 Personal exemption ON Toxes on above income Tox liability on bese bracked 18,481.25 Tose mabilis on excess of bese (107,000-99750)x284_4550 Total boru trobility 23,031.25 Tex on Dividend Sla capital going Dividend income 02 12500 Long term copikal pain (24500-6, 700) 17,800 35,300 Cox on above (35,300X15%) Crotal federa tore liability = 23,031.25 +5,295 28,326.25 1 8 Monday Cotat 5,295 Scanned with CamScanner

Note : Assumed for that year, standard deduction is less than the itemized deduction (since the year of taxation is not given)