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Mary Jarvis is a single individual who is working on filing her tax return for the previous year. She has assembled the following relevant information:
Mary Jarvis is a single individual who is working on filing her tax return for the previous year. She has assembled the following relevant information:
- She received $96,000 in salary.
- She received $14,500 of dividend income.
- She received $3,400 of interest income on Home Depot bonds.
- She received $24,000 from the sale of Disney stock that was purchased 2 years prior to the sale at a cost of $6,700.
- She received $8,500 from the sale of Google stock that was purchased 6 months prior to the sale at a cost of $5,000.
- Mary receives one exemption ($4,000), and she has allowable itemized deductions of $7,500. These amounts will be deducted from her gross income to determine her taxable income.
Dividend Income | $14,500.00 | Taxable Income | Amount Paid on Base | Percentage on Excess over Base | |
Interest Income | $3,400.00 | $0.00 | $0.00 | 10.00% | |
LT Stock Sale | $24,000.00 | $9,225.00 | $922.50 | 15.00% | |
LT Stock Cost | $6,700.00 | $37,450.00 | $5,156.25 | 25.00% | |
ST Stock Sale | $8,500.00 | $90,750.00 | $18,481.25 | 28.00% | |
ST Stock Cost | $5,000.00 | $189,750.00 | $46,075.25 | 33.00% | |
Personal Exemption | $4,000.00 | $411,500.00 | $119,401.25 | 35.00% | |
Itemized Deductions | $7,500.00 | $413,200.00 | $119,996.25 | 39.60% | |
Apllicable Tax Rate on Dividends & LT Capital Gains | 15.00% | ||||
a. Calculation of Federal Tax Liability | |||||
Calculation of Taxable Income: | Formulas | ||||
Salary | #N/A | ||||
Interest Income | #N/A | ||||
ST Capital Gains | #N/A | ||||
Income before Exemption and Deductions | #N/A | ||||
Personal Exemption | #N/A | ||||
Itemized Deductions | #N/A | ||||
Taxable Income before Dividends & LT Capital Gains | #N/A | ||||
Taxes on Taxable Income Before Dividends & LT Capital Gains: | |||||
Tax Liability on Base of Bracket | #N/A | ||||
Tax Liability on Excess over Base | #N/A | ||||
Tax on Taxable Income before Dividends & LT Capital Gains | #N/A | ||||
Taxes on Dividends & LT Capital Gains: | |||||
Dividend Income | #N/A | ||||
LT Capital Gains Income | #N/A | ||||
Total Dividend & LT Capital Gains Income | #N/A | ||||
Tax on Dividends & LT Capital Gains Income | #N/A | ||||
Total Federal Tax Liability | #N/A | ||||
b. Calculation of Marginal Tax Rate | |||||
Marginal Tax Rate | #N/A | ||||
c. Calculation of Average Tax Rate | |||||
Average Tax Rate | #N/A |
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