for finance class practice
Federal Income Taxes Individuals and firms pay out a significant portion of their income as taxes, so taxes are important in both personal and corporate decisions. Our tax system is progressive Individual Individuals pay taxes on wages, on investment income, and on the profits of proprietorships and partnerships. Taxable income is defined as gross income less a set of exemptions and deductions. In 2013, the personal exemption is $3,900 per person. A capital gain (loss) is the profit (los) from the sale of a capital asset for more (less) than its purchase price. In 2013, for most taxpayers a les capital gain is taxed at a maximum rate of 15%, while a Select capital gains taxed as ordinary Income (For single taxpayers with incomes over $400,000 and married taxpayers filling jointly with incomes over $450,000, the maximum tax rate on long-term capital gains has increased to 20%.). Slect income consists of dividend and interest income. Interest income (except interest on state and local government debt which is exempt from federal taxes) is taxed as Select while dividends are taxed at the same rate as long-term Select . Generally, interest payments are not tax deductible for individuals except for interest on see within certain limits. Projected 2013 tax rate schedules are shown for single individuals and married couples filing jointly 2013 Individual Tax Rates Single Individuals It Pays This Plus This Percentage If a Corporation's Amount on the on the Excess over the Taxable Income Is Base of the Bracket Base (Marginal Rate) Up to $8,925 $0 10.0% $8,925 - $36,250 892.50 15.0 $36,250 - $87,850 4,991.25 25.0 $87,850 - $183,250 17,891.25 28.0 $183,250 - $398,350 44,603.25 33.0 $398,350 - $400,000 115,586.25 35.0 Over $400,000 116,163.75 39.6 Average Tax Rate at Top of Bracket 10.0% 13.8 20.4 24.3 29.0 29.0 39.6 Standard deduction for individual: $6,100 Married couples Filing Joint Returns It Pays This If a Corporation's Amount on the Taxable Income Is Base of the Bracket Up to $17,850 $0 $17,850 - $72,500 1,785.00 $72,500 - $146,400 9,982.50 Plus This Percentage on the Excess over the Base (Marginal Rate) 10.0% 15.0 Average Tax Rate at Top of Bracket 10.0% 13.8 19.4 25.0 Standard deduction for individual: $6,100 Married couples Filing Joint Returns It Pays This If a Corporation's Amount on the Taxable Income Is Base of the Bracket Up to $17,850 $0 $17,850 - $72,500 1,785.00 $72,500 - $146,400 9,982.50 $146,400 - $223,050 28,457.50 $223,050 - $398,350 49,919.50 $398,350 - $450,000 107,768.50 Over $450,000 125,846.00 Plus This Percentage on the Excess over the Base (Marginal Rate) 10.0% 15.0 25.0 28.0 33.0 35.0 39.6 Average Tax Rate at Top of Bracket 10.0% 13.8 19.4 22.4 27.1 28.0 39.6 ed Standard deduction for married couples filing jointly: $12,200 Quantitative Problem: Jenna is a single taxpayer with no dependents so she qualifies for one p $122,000. She doesn't itemize deductions, so she will take the standard deduction and her person addition, during the year she sold common stock that she had owned for five years for a net profi taxes? Round your intermediated and final answers to the nearest cent
