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 the profit (loss) from the sale of a capital asset for more (less) than its purchase price. In 2018, for most taxpayers a capital gain is taxed at a maximum rate of 15%, while a capital gain is taxed as ordinary income [for high-income taxpayers the tax rate on long-term capital gains is 20%]. 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 while dividends are taxed at the same rate as long-term Generally, interest payments are not tax deductible for individuals except for interest on within certain limits. Projected 2018 tax rate schedules are shown for single individuals and married couples filing jointly. Standard deduction for married couples filing jointly: $24,000 five years for a net profit of $7,500. How much does Jenna owe to the IRS for taxes? Do not round intermediate calculations. Round your answer to the nearest cent. Corporate Corporations earn most of their income from operations; however, they may also receive interest and dividend income. income is taxed as ordinary income; however, income is taxed more favorably. 50% of received is excluded from taxable income, while the remaining 50% is taxed at the ordinary tax rate. For businesses, payments are regarded as an expense so they are tax deductible; however, dividend payments are not tax deductible. Consequently, our tax system encourages financing over inancing. Depreciation expense is tax deductible, so the larger the depreciation, the the taxable income, the the taxes, and the [ the firm's operating cash flow