Financial Planning Exercise 2 Estimating taxable income, tax liability, and potential refund Arabella Cunningham is 24 years old and single, lives in an apartment, and has no dependents. Last year she earned $37,400 as a sales representative for Planning Associates; $2,618 of her wages was withheld for federal income taxes. In addition, she had interest income of $171 The standard deduction in 2018 was $12,000 for single. The appropriate tax rate schedule is shown below: EXHIBIT 3.3 Sample 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 $82,501-$157,500 $157,501-$200,000 $200,001-$500,000 $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 8:36 PM 120000 $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. Brade New Save & Continue Continue without saving