Ashley is single and has no children. She earns an annual salary of $32,000 and has no other income. Her employer deducts 5% from her salary as her contribution to her employer-sponsored retirement plan. Her health-insurance premiums are paid by her employer.

Use the 2018 Tax Brackets attachment to help answer the following questions.

1. Subtract Ashley's standard deduction from her "Box 1 Wages" to determine her federal taxable income.

2. Use the 2018 Tax Brackets to find which tax bracket Ashely falls within and calculate her federal income tax.

3. Ashley takes two courses at Durham Tech, paying a total of $548 in tuition and fees for the year. She gets to take a Lifetime Learning Credit equal to 20% of this amount.

a) Subtract her Lifetime Learning Credit from her federal income tax to determine the amount she owes.

b) What percent of her annual salary does she pay in federal income

4. Go back to the amount you determined for Ashley's "Box 1 Wages" and subtract her NC standard deduction to find her NC taxable income.

Federal Income Tax Brackets 2018 For 2018 the Personal Exemption has been eliminated. (2018 Standard Deduction is $12,000) Single: Tax Bracket: Taxable Income SO-$9,524 $9,525- $38,699 10% 12% $38,700-$82.499 22% |S82,500-$157,499 $157,500-$199,999 $200,000-$499,999 $500,000+ 24% 32% 35% 37% 2018 Payroll Taxes Medicare tax: 1.45% of wages up to $200,000 (if filing as single), and more for over $200,000. Social Security tax: 6.2 % of wages up to $128,400 (per person), so maximum tax is $7,960.80. North Carolina Income Tax 2018 No personal exemption. Standard deductions: Single: $8750 Head of household: $14,000 Married filing jointly: $17,500 Tax rate: 5.5% for all (no brackets)