Question
Liam McKenzie is single, graduated from college in 2018 and began work as a system analyst in July of that year. He is preparing to
Liam McKenzie is single, graduated from college in 2018 and began work as a system analyst in July of that year. He is preparing to file his income take return for 2018 and has collected the financial information shown below for that clear year.
Scholarship used to pay tuition - $5,750
Scholarship used to pay room and board - $1,850
Salary - $55,000
Interest Income- $185
Potential itemized deductions - $3,000
Income Taxes Withheld- $2,600
a.Prepare Liam's 2018 tax returns, using a $12,000 standard deduction and the tax rates given in below Individual Taxpayers
If Taxable Income Is Between: The Tax Due is: 10% of taxable income $952.50 + 12% of the amount over $9
b. Prepare Liam's 2018 tax return using the data in part a along with the following information IRA contribution $5,000 Cash Dividends received $150
Individual Taxpayers If Taxable Income Is Between: The Tax Due is: 10% of taxable income $952.50 + 12% of the amount over $9,525 $4,453.50 + 22% of the amount over $38,700 0 - $9,525 $9,526 - $38,700 $38,701 - $82,500 $82,501 - $157,500 $157,501 - $200,000 $200,001 - $500,000 $500,001 + $14,089.50 + 24% of the amount over $82,500 $32,089.50 + 32% of the amount over $157,500 $45,689.50 + 35% of the amount over $200,000 $150,689.50 + 37% of the amount over $500,000 Individual Taxpayers If Taxable Income Is Between: The Tax Due is: 10% of taxable income $952.50 + 12% of the amount over $9,525 $4,453.50 + 22% of the amount over $38,700 0 - $9,525 $9,526 - $38,700 $38,701 - $82,500 $82,501 - $157,500 $157,501 - $200,000 $200,001 - $500,000 $500,001 + $14,089.50 + 24% of the amount over $82,500 $32,089.50 + 32% of the amount over $157,500 $45,689.50 + 35% of the amount over $200,000 $150,689.50 + 37% of the amount over $500,000Step by Step Solution
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