Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 $3,400, and also opened up an IRA, to which she contributed $450 last year. Her savings accounts earn 2% interest per year, and she also had received an unexpected $2,350 gift from her great aunt. Jamie was also lucky enough last year to win a raffle prize of $3,700, 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.

image text in transcribed

image text in transcribed image text in transcribed

(Need help with everything in estimated tax and under. All values above estimated tax is correct.)

TAX RATES Use your taxable income in conjunction with the appropriate tax table or tax schedule. For several years previous to 1987, there were 14 tax rates, ranging from 11 to 50 percent. For 2018, the seven-rate system for federal income tax was as follows: Single Taxpayers Married Taxpayers Filing Jointly Rate on Taxable income Head of Households 10% Up to $9,525 Up to $19,050 Up to $13,600 12 $9,525-$38,700 $19,050-$77,400 $13,600-$51,800 22 $38,700-$82,500 $77,400-$165,000 $51,800-$82,500 24 $82,500-$157,500 $165,000-$315,000 $82,500-$157,500 33 $157,500-$200,000 $315,000-$400,000 $157,500-$200,000 35 $200,000-$500,000 $400,000-$600,000 $200,000-$500,000 37 $500,000+ $600,000+ $500,000+ $360 Current Financial Situation Assets: Checking account Savings account (Interest earned last year) Emergency fund savings Monthly Expenses: $2,950 Rent obligation $8,600 Utilities $210 Food $220 $215 $5,600 Gas/maintenance $195 account SO $185 $35 (Interest earned last year) IRA balance (Contribution made last year) Car Llabilities: Student loan Credit card balance (Interest pald last year) Income: Gross monthly salary $95 Credit card payment $520 Savings allocation: $450 Regular savings (monthly) $4,700 Rainy day savings (monthly) Entertainment: $12,500 Cake decorating class $0 Movies with friends $80 $60 $80 $3,400 $ 44,805 450 44,355 12,000 $ $ 0 Estimated Income Tax Gross income (wages, salary, investment income, and other ordinary income) Less adjustments to income (see current tax regulations) Equals adjusted gross income Less standard deduction (use 2018 amounts) or Itemized deductions (whichever total is larger) Medical expenses (exceeding 10% of AGI) State/local income and property taxes Mortgage, home equity loan interest Contributions Casualty and theft losses Moving, job-related, and miscellaneaous expenses (exceeding 2% of AGI) Total itemized deductions Larger of standard or itemized deductions Equals taxable income 0 0 $ $ 0 0 $ 0 0 $ 12,000 32,355 Estimated tax (based on 2018 tax tables) Less tax credits Plus other taxes Equals total tax liability Less estimated withholding and payments Equals tax due (or refund) $ 0 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management And Cost Accounting

Authors: Colin Drury

5th Edition

1861525362, 978-1861525369

More Books

Students also viewed these Accounting questions