Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Arabella Cunningham is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $36,500 as a sales representative

Arabella Cunningham is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $36,500 as a sales representative for Planning Associates; $2,555 of her wages was withheld for federal income taxes. In addition, she had interest income of $122.

The standard deduction in 2018 was $12,000 for single. The appropriate tax rate schedule is shown below:

EXHIBIT 3.3Sample Tax Rate Schedules
Tax rates levied on personal income vary with the amount of reported taxable income and the taxpayer's filing status.
2018 Tax Rate Schedules
Single
Taxable Income Tax Rate
$0$9,525 10% of taxable income
$9,526$38,700 $952.50 plus 12% of the amount over $9,525
$38,701$82,500 $4,453.50 plus 22% of the amount over $38,700
$82,501$157,500 $14,089.50 plus 24% of the amount over $82,500
$157,501$200,000 $32,089.50 plus 32% of the amount over $157,500
$200,001$500,000 $45,689.50 plus 35% of the amount over $200,000
$500,001 or more $150,689.50 plus 37% of the amount over $500,000

a. Estimate her taxable income. $

b. Estimate her tax liability. Round the answer to the nearest cent. Use unrounded values in later calculations. (Hint: Use the tax rate schedules given in Exhibit 3.3 to determine her tax liability.) $

c. Estimate her tax refund or tax owed. Enter tax owed, if any, as negative amount. Round the answer to the nearest cent. $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Exploring Public Relations And Management Communication

Authors: Ralph Tench, Stephen Waddington

5th Edition

1292321741, 9781292321745

More Books

Students also viewed these Finance questions