Chapter 3 Financial Planning Exercise 2 Estimating taxable income, tax liability, and potential refund Charlotte Taylor is 24 years old and single, lives in an apartment, and has no dependents. Last year (2018) she earned $55,000 as a sales assistant for Office Furniture Rentals; $6,870 of her wages was withheld for federal income taxes. In addition, she had interest income of $182. The standard deduction in 2018 was $12,000 for single. Note that personal exemptions were suspended for 2018. Refer to Exhibit 3.3 for the appropriate tax rate schedule. 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. $ EXHIBIT 3.3 2018 Tax Rate Schedules Single Taxable Income Tax Rate $0-$9,525 10% of taxable income $9,526-$38,700 $38,701-$82,500 $82,501-$157,500 $157,501-$200,000 $200,001-$500,000 $952.50 plus 12% of the amount over $9,525 $4,453.50 plus 22% of the amount over $38,700 $14,089.50 plus 24% of the amount over $82,500 $32,089.50 plus 32% of the amount over $157,500 $45,689.50 plus 35% of the amount over $200,000 $150,689.50 plus 37% of the amount over $500,000 $500,001 or more