Mitch, a single taxpayer, earns $100,000 in taxable income and $10,000 in interest from an investment...

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Mitch, a single taxpayer, earns $100,000 in taxable income and $10,000 in interest from an investment in city of Birmingham B 2020 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: 0 $ 9,875 $ 9.875 $ 40,125 $ 4

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Answer 1

Answer #1

Option B ( $ 18,080) is the Correct Answer

Total Taxable Income of Mitch = $ 100,000

Income in the form of Interest from Investment in Birmingham City Bonds is exempt from Federal Tax.

As Mitch is a single tax payer he will be taxed According to schedule X

Tax on Income = 14,605.50 + 24% (100,000 - 85,525)

Tax on Income = 14,605.50 + 24% (14,475)

Tax on Income = 14,605.50 + 3,474

Tax on Income = $ 18,079.50

Rounded off = $ 18,080

Federal Tax for Mitch to pay For Year 2020 = $ 18,080

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Answer 2

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