2013 Individual Tax Rates Single Individuals It Pays This Plus This Percentage If a Corporation's Amount on the on the Excess over the Taxable Income Is Base of the Bracket Base (Marginal Rate) Up to $8,925 $0 10.0% $8,925 - $36,250 892.50 15.0 $36,250 - $87,850 4,991.25 25.0 $87,850 - $183,250 17,891.25 28.0 $183,250 - $398,350 44,603.25 33.0 $398,350 - $400,000 115,586.25 35.0 Over $400,000 116,163.75 39.6 Average Tax Rate at Top of Bracket 10.0% 13.8 20.4 24.3 29.0 29.0 39.6 Standard deduction for individual: $6,100 : $ Married couples Filing Joint Returns It Pays This Plus This Percentage If a Corporation's Amount on the on the Excess over the Taxable Income Is Base of the Bracket Base (Marginal Rate) Up to $17,850 $0 10.0% $17,850 - $72,500 1,785.00 15.0 $72,500 - $146,400 9,982.50 25.0 $146,400 - $223,050 28,457.50 28.0 $223,050 - $398,350 49,919.50 33.0 $398,350 - $450,000 107,768.50 35.0 Over $450,000 125,846.00 39.6 Average Tax Rate at Top of Bracket 10.0% 13.8 19.4 22.4 27.1 28.0 39.6 Standard deduction for married couples filing jointly: $12,200 Quantitative Problem: Jenna is a single taxpayer with no dependents so she qualifies for one personal exemption. During 2013, she earned wages of $115,000. She doesn't itemize deductions, so she will take the standard deduction and her personal exemption to calculate 2013 taxable income. In addition, during the year she sold common stock that she had owned for five years for a net profit of $5,500. How much does Jenna owe to the IRS for taxes? Round your intermediated and final answers to the nearest cent. s Corporate Corporations earn most of their income from operations; however, they may also receive interest and dividend income. Interest income is taxed as ordinary income; however, dividend income is taxed more favorably. 70% of dividends received is excluded from taxable income, while the remaining 30% is taxed at the ordinary tax rate. For businesses, interest payments are regarded as an expense so they are tax deductible; however, dividend payments are not tax deductible. Consequently, our tax system encourages debt financing over equity financing. Depreciation expense is tax deductible, so the larger the depreciation, the lower the taxable income, the lower the taxes, and the higher the firm's operating cash flow. The projected 2013 tax rate schedule for corporations is shown below. 2013 Corporate Tax Rates It Pays This Plus This Percentage Average Tax If a Corporation's Amount on the on the Excess over the Rate at Taxable Income Is Base of the Bracket Base (Marginal Rate) Top of Bracket Up to $50,000 $0 15.0% 15.0% $50,000 - $75,000 7,500 25.0 18.3 $75,000 - $100,000 13,750 34.0 22.3 $100,000 - $335,000 22,250 39.0 34.0 $335,000 - $10,000,000 113,900 34.0 34.0 $10,000,000 - $15,000,000 3,400,000 35.0 $15,000,000 - $18,333,333 5,150,000 38.0 35.0 Over $18,333,333 6,416,667 35.0 35.0 34.3 Quantitative Problem: Andrews Corporation has income from operations of $247,000. In addition, it received interest income of $24,700 and received dividend income of $30,200 from another corporation. Finally, it paid $13,000 of interest income to its bondholders and paid $43,600 of dividends to its common stockholders. Using the 2013 corporate tax schedule, what is the firm's federal income tax? Round your intermediated and final answers to the nearest cent