Continuing Case 20. Income Tax Estimation

Jamie Lee Jackson, age 26, is in her last semester of college and is waiting for graduation day that is just around the corner! It is the time of year again when Jamie Lee must file her annual federal income taxes. Last year, she received an increase in salary from the bakery, which brought her gross monthly earnings to $2,550, and also opened up an IRA, to which she contributed $300 last year. Her savings accounts earn 2% interest per year, and she also had received an unexpected $1,500 gift from her great aunt. Jamie was also lucky enough last year to win a raffle prize of $2,000, most of which was deposited into her regular savings account after paying off her credit card balance.

Estimate Jamie Lee's current tax liability by completing the form below. Use the 2018 values for standard deduction ($12,000). Each answer must have a value for the assignment to be complete. Enter "0" for any unused categories. 2018 Tax Rates.

Current Financial Situation

Assets:			Monthly Expenses:
Checking account	$2,250		Rent obligation	$275
Savings account	$6,900		Utilities	$135
(Interest earned last year)	$125		Food	$130
Emergency fund savings account	$3,900		Gas/maintenance	$110
(Interest earned last year)	$75		Credit card payment	$0
IRA balance	$350		Savings allocation:
(Contribution made last year)	$300		Regular savings (monthly)	$175
Car	$3,000		Rainy day savings (monthly)	$25
Liabilities:			Entertainment:
Student loan	$10,800		Cake decorating class	$35
Credit card balance	$0		Movies with friends	$50
(Interest paid last year)	$55
Income:
Gross monthly salary	$2,550

Gross income (wages, salary, investment income, and other ordinary income)$32,800

Less adjustments to income (see current tax regulations)$300

Equals adjusted gross income$32,500

Less standard deduction (use 2018 amounts)$12,000

or

Itemized deductions (whichever total is larger)

Medical expenses (exceeding 10% of AGI)$0

State/local income and property taxes: $0

Mortgage, home equity loan interest: $0

Contributions$0Casualty and theft losses: $0

Moving, job-related, and miscellaneaous expenses (exceeding 2% of AGI): $0

Total itemized deductions: $0

Larger of standard or itemized deductions: $12,000

Equals taxable income: $20,500

Estimated tax (based on 2018 tax rates)

Less tax credits: $0

Plus other taxes: $0

Equals total tax liability: $0

Less estimated withholding and payments: $0

Equals tax due (or refund): $0

I think I have the first part correct, I just need someone to go over my answers and/or help me with the second part where it says "ESTIMATED TAX based on 2018"

Thank you! :)