Comprehensive Problem 12-51 (LO 12-1, LO 12-2, LO 12-3) (Algo)

Santini's new contract for 2022 indicates the following compensation and benefits:

Benefit DescriptionAmountSalary$ 136,000Health insurance15,000Restricted stock grant2,500Bonus6,200Hawaii trip5,200Group-term life insurance2,800Parking ($334 per month)4,008

Santini is 54 years old at the end of 2022. He is single and has no dependents. Assume that the employer matches $1 for $1 for the first $6,000 that the employee contributes to his 401(k) during the year. The restricted stock grant is 500 shares granted when the market price was $5 per share. Assume that the stock vests on December 31, 2022, and that the market price on that date is $37.50 per share. Also assume that Santini is willing to make any elections to reduce equity-based compensation taxes. The Hawaii trip was given to him as the outstanding salesperson for 2021. The group-term life policy gives him $150,000 of coverage. Assume that Santini does not itemize deductions for the year.

Determine Santini's taxable income and income tax liability for 2022. Use Tax rate schedules and Exhibit 12-8.

2022 Tax Rate Schedules

IndividualsSchedule X-Single

If taxable income is over:But not over:The tax is:$ 0$ 10,27510% of taxable income$ 10,275$ 41,775$1,027.50 plus 12% of the excess over $10,275$ 41,775$ 89,075$4,807.50 plus 22% of the excess over $41,775$ 89,075$ 170,050$15,213.50 plus 24% of the excess over $89,075$ 170,050$ 215,950$34,647.50 plus 32% of the excess over $170,050$ 215,950$ 539,900$49,335.50 plus 35% of the excess over $215,950$ 539,900$162,718 plus 37% of the excess over $539,900

Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)

If taxable income is over:But not over:The tax is:$ 0$ 20,55010% of taxable income$ 20,550$ 83,550$2,055 plus 12% of the excess over $20,550$ 83,550$ 178,150$9,615 plus 22% of the excess over $83,550$ 178,150$ 340,100$30,427 plus 24% of the excess over $178,150$ 340,100$ 431,900$69,295 plus 32% of the excess over $340,100$ 431,900$ 647,850$98,671 plus 35% of the excess over $431,900$ 647,850$174,253.50 plus 37% of the excess over $647,850

Schedule Z-Head of Household

If taxable income is over:But not over:The tax is:$ 0$ 14,65010% of taxable income$ 14,650$ 55,900$1,465 plus 12% of the excess over $14,650$ 55,900$ 89,050$6,415 plus 22% of the excess over $55,900$ 89,050$ 170,050$13,708 plus 24% of the excess over $89,050$ 170,050$ 215,950$33,148 plus 32% of the excess over $170,050$ 215,950$ 539,900$47,836 plus 35% of the excess over $215,950$ 539,900$161,218.50 plus 37% of the excess over $539,900

Schedule Y-2-Married Filing Separately

If taxable income is over:But not over:The tax is:$ 0$ 10,27510% of taxable income$ 10,275$ 41,775$1,027.50 plus 12% of the excess over $10,275$ 41,775$ 89,075$4,807.50 plus 22% of the excess over $41,775$ 89,075$ 170,050$15,213.50 plus 24% of the excess over $89,075$ 170,050$ 215,950$34,647.50 plus 32% of the excess over $170,050$ 215,950$ 323,925$49,335.50 plus 35% of the excess over $215,950$ 323,925$87,126.75 plus 37% of the excess over $323,925

Note: Round your answers to the nearest whole dollar amount.

EXHIBIT 12-8 Uniform Premiums for $1,000 of Group-Term Life Insurance Protection

5-Year Age BracketCost per $1,000 of Protection for One MonthUnder 25$0.0525 to 29 .0630 to 34 .0835 to 39 .0940 to 44 .1045 to 49 .1550 to 54 .2355 to 59 .4360 to 64 .6665 to 69 1.2770 and above 2.06

Source: Reg. 1.79-3(d)(2) and also published in IRS Publication 15-B.

Taxable Income = ?

Income tax liability = ?