Jeremy earned $160,000 in salary and $9,000 in interest income during the year. Jeremy has two qualifying dependent children who live with him. He qualifies to file as head of household and has $15,500 in itemized deductions. Neither of his dependents qualifies for the child tax credit. (use the tax rate schedules.). (Do not round intermediate calculations. Round "Income tax liability" to 2 decimal places.)

a.

Use the 2015 tax rate schedules to determine Jeremy?s taxes due.

b.

Assume that in addition to the original facts, Jeremy has a long-term capital gain of $7,500. What is Jeremy?s tax liability including the tax on the capital gain?

c.	Assume the original facts except that Jeremy had only $8,000 in itemized deductions. What is Jeremy?s total income tax liability?

QUESTION ONE PART B GROSS INCOME salary interest income capital gain TOTAL INCOME DEDUCTIONS AND ALLOWANCES support to two children (4000 each) head of household deduction itemized deduction personal deduction TOTAL DEDUCTIONS TAXABLE INCOME $ 160,000 9000 7500 $ 176,500 8,000 9,350 15,000 4,000 36,350 140150 QUESTION ONE PART C GROSS INCOME salary interest income capital gains TOTAL INCOME DEDUCTION AND ALLOWANCES support two children (4000 each) head of household deduction itemized deduction personal deduction TOTAL DEDUCTIONS TOTAL TAXABLE INCOME QUESTION ONE PART A Gross income salary Interest income total income deductions and allowances support of two children@$4000 each head of household deductions itemized deductions $ 160,000 9,000 7,500 $ $ 176,500 8,000 9,350 8,000 4,000 29,350 147150 $ $ $ 160000 9000 169000 8000 9350 15000 personal deductions total deductions taxable income 4000 36350 132650 COMPUTATION OF TAX LIABILTY SLAB 1st WORKINGS 13150 x 10% TAX LIABILTY ($) 1315 2nd 1315 + 15% x 37050 3rd 6872.50 + 25% x 79400 88,722.50 26,722.50 + 28% x 10550 29676.5 125271.5 4th 5557.5 COMPUTATION OF TAX LIABILITY SLAB 1st WORKINGS 13150 X 10 % 2nd 1315 + 15% x 37050 3rd 6872.50 + 25% x 79400 4th 26772.50 + 17550 x 28% computing of tax liability SLAB WORKINGS 1ST 13150 10% TAX LIABILTY 1315 6872.5 26722.5 31,686.60 66596.6 TAX LIABILITY 1315 2ND 1315 + 15% 37050 6,872.50 3RD 6872.5+ 25% 79400 26,722.50 4TH 26722.5 + 28% 3050 27,576.50 62,486.50