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Linette,a single taxpayer, had the following income and deductions for the tax year 2018 INCOME: Salary $95,000 Business Income 28,000 Interest income from taxable bonds

Linette,a single taxpayer, had the following income and deductions for the tax year 2018

INCOME: Salary $95,000
Business Income 28,000
Interest income from taxable bonds 5,000
Tax-exempt bond interest 3,500
TOTAL INCOME 131,500
DEDUCTIONS: Business expenses $7,000
Itemized deductions 15,000
TOTAL DEDUCTIONS 22,000

Filing Status
Married individuals filing joint returns and surviving spouses $24,000
Heads of households $18,000
Unmarried individuals (other than surviving spouses and heads of households) $12,000
Married individuals filing separate returns $12,000
Additional standard deduction for the aged and the blind; Individual who is married and surviving spouses $1,300* *
Additional standard deduction for the aged and the blind; Individual who is unmarried and not a surviving spouse $1,600* *
Taxpayer claimed as dependent on another taxpayers return: Greater of (1) earned income plus $350 or (2) $1,050.
* These amounts are $2,600 and $3,200, respectively, for a taxpayer who is both aged and blind.

.

If taxable income is: The tax is:
Not over $9,525 10% of taxable income.
Over $9,525 but not over $38,700 $952.50 + 12% of the excess over $9,525.
Over $38,700 but not over $82,500 $4,453.50 + 22% of the excess over $38,700.
Over $82,500 but not over $157,500 $14,089.50 + 24% of the excess over $82,500.
Over $157,500 but not over $200,000 $32,089.50 + 32% of the excess over $157,500.
Over $200,000 but not over $500,000 $45,689.50 + 35% of the excess over $200,000.
Over $500,000 $150,689.50 + 37% of the excess over $500,000.

Requirement a. Compute Linette's taxable income and federal tax liability for 2018.

First calculate the gross income, then calculate taxable income and the federal tax liability. (Calculate the tax using the tax rate schedule. Do not round interim tax calculations. Round the amount entered into the cell to the nearest whole dollar. If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero.)

Total income from whatever source derived

Minus:

Exclusions, as provided in the tax law

Gross income

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