I forgot to include in my original question requirements B and C. Requirement B is to computer Laurens Marginal, average and effective tax rates. Requirement C is for tax purposes, which of the three rates in part B is the most important.
Lauren, a single taxpayer, had the following income and deductions for the tax year 2018: E: (Click the icon to view the income and deductions.) 3 (Click the icon to view the standard deduction amounts.) Click the icon to view the 2018 tax rate schedule for the Single filing status.) Read the requirements. Requirement a. Compute Lauren's taxable income and federal tax liability for 2018. First calculate the gross income, then calculate taxable income and the federal tax liability Calculate the tax using the tax rate schedule. Do not round interim tax calculations. Round the amount entered into the cell to the nearest whole dollar. If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero.) Total income from whatever source derived Minus: Exclusions, as provided in the tax law Gross income - X Data Table INCOME A Salary Business Income Interest income from taxable bonds Tax-exempt bond interest TOTAL INCOME 115,000 26,000 9,000 4,400 154,400 DEDUCTIONS: $ Business expenses Itemized deductions TOTAL DEDUCTIONS 7,000 22,000 29,000 Print Done Reference $ STANDARD DEDUCTION Filing Status Married individuals filing joint returns and surviving spouses $ 24,000 Heads of households $ 18,000 Unmarried individuals (other than surviving spouses and heads of households) $ 12,000 Married individuals filing separate returns 12,000 Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses $1,300** Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse $1,600** Taxpayer claimed as dependent on another taxpayer's return: Greater of (1) earned income plus $350 or (2) $1,050. * These amounts are $2,600 and $3,200, respectively, for a taxpayer who is both aged and blind. Personal and Dependency Exemptions Suspended: In conjunction with the increased standard deduction amount, the Tax Cuts and Jobs Act reduces the personal exemption amount to $0 for tax years from 2018 through 2025, effectively suspending the exemptions for these years. Print Done - X Reference If taxable income is: Not over $9,525 Over $9,525 but not over $38,700 Over $38,700 but not over $82,500 Over $82,500 but not over $157,500 Over $157,500 but not over $200,000 Over $200,000 but not over $500,000 Over $500,000 Single The tax is: . 10% of taxable income. $952.50 + 12% of the excess over $9,525. . $4,453.50 + 22% of the excess over $38,700. $14,089.50 + 24% of the excess over $82,500. $32,089.50 + 32% of the excess over $157,500. . $45,689.50 + 35% of the excess over $200,000 $150,689.50 + 37% of the excess over $500,000. Print Done Particulars Amount Salary $ 115,000.00 Business income $ 26,000.00 Interest income from taxable bonds $ 9,000.00 Tax exempt bond interest $ 4,400.00 Total income from whatever source derived $ 154,400.00 Minus: exclusions provided in the tax law Tax exempt bond interest $ (4,400.00) Gross income $ 150,000.00 Minus: deductions for adjusted gross income Business expenses $ (7,000.00) Adjust gross income (AGI) $ 143,000.00 Minus: deductions from AGI Itemized deductions $ (22,000.00) Taxable income $ 121,000.00 Tax liability (14089.50+(24%*(121000-82500)) $ 23,330.00
