Jan's combined marginal tax rate on additional income is 25%. Jan's employer gives her the option of tax exempt health insurance coverage or taxable compensation. Comparable health insurance would cost Jan $12,000 per year to purchase. Assuming Jan wishes to be insured, how much taxable compensation would she need to earn to have an after-tax value equal to the exempt health insurance coverage? Sam receives a judgment for injuries received from an automobile accident. Of the award, $30,000 was for injuries, pain, and medical bills; $2,000 was for lost wages; and $20,000 was for punitive damages. What is the taxable portion of this award? Henry paid $149,640 for a 10 year annuity that pays $1,450 per month. Henry received 8 payments in the first year. What was the taxable portion of this annuity for the first year? James and Martha Willard are 67 and 65 years old respectively. The couple received the following income items during 2020: Wages from part-time employment $10,000 $50,000 Fully taxable pensions Interest from Liberty Bank & Trust Certificates of Deposit $4,000 Interest from Cedar County (lowa) Bond $2,000 Social Security Benefits $45,000 What is the taxable amount of their social security benefits? Garrett Gibbons is an unmarried person who is 74 years old. He has the following income during 2020: Fully taxable pension $27,000 Interest from First Bank $2,000 Taxable portion of Social Security Benefits (in other words, don't calculate this!) $7,900 He has no Adjustments to Income and his itemized deductions are $4,500. What is Garrett's Income Tax Liability for 2020? USE THE TAX RATE SCHEDULES APPEARING IN APPENDIX A. Single-Schedule X Head of household-Schedule Z If taxable income is: Over- $ 0 But not over- $ 9,875 The tax is: of the amount over- If taxable income is: Over- of the But not over- amount The tax is: over- 10% $ 0 $ 0 $14,100 ......... 10% $ 9,875 40,125 40,125 85,525 $ 987.50 + 12% 9,875 14,100 53,700 $ 1,410.00 + 12% 14,100 4,617.50 +22% 40,125 53,700 85,500 6,162.00 +22% 53,700 85,525 163,300 14,605.50+24% 85,525 85,500 163,300 13,158.00 +24% 85,500 163,300 207,350 33,271.50+32% 163,300 163,300 207,350 31,830.00 + 32% 163,300 207,350 518,400 47,367.50+35% 207,350 207,350 518,400 518,400 156,235.00 + 37% 518,400 518,400 45,926.00 + 35% 154,793.50+37% 207,350 518,400 Married filing jointly or Qualifying widow(er) Schedule Y-1 Married filing separately-Schedule Y-2 If taxable income is: Over- But not over- The tax is: of the amount over- If taxable income is: Over- $ 0 $ 19,750 -10% $ 0 $ 0 But not over- $ 9,875 The tax is: of the amount over- .........10% $ 19,750 80,250 $ 1,975.00+12% 19,750 9,875 40,125 $ 987.50+12% 9,875 80,250 171,050 9,235.00+22% 80,250 40,125 85,525 4,617.50+22% 40,125 171,050 326,600 29,211.00+24% 171,050 85,525 163,300 14,605.50 + 24% 85,525 326,600 414,700 66,543.00 +32% 326,600 163,300 207,350 33,271.50+32% 163,300 414,700 622,050 94,735.00+35% 414,700 207,350 311,025 47,367.50+35% 207,350 622,050 167,307.50+37% 622,050 311,025 83,653.75 + 37% 311,025